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64-TH CONGRESS \ ^FMATF (DOCUMENT
1st Session } SENATE j No> 415
INDUSTRIAL RELATIONS
FINAL REPORT AND TESTIMONY
SUBMITTED TO CONGRESS BY THE
COMMISSION ON INDUSTRIAL RELATIONS
CREATED BY THE ACT OF
AUGUST 23, 1912
VOL. I
WASHINGTON
GOVERNMENT PRINTING OFFICE
1916
AUTHORITY TO PRINT.
[Public Resolution No. 15, Sixty-fourth Congress, first session.]
Resolved by the Senate and House of Representatives of the United States of America in
Congress assembled, That the final report of the United States Commission on Industrial
Relations, including the report of Basil M. Manly, director of research and investiga-
tion, and the individual reports and statements of the several commissioners, together
with all the testimony taken at its hearings, except exhibits submitted in printed
form, which shall be appropriately referred to in said testimony, be printed as a Senate
document under the direction of the Joint Committee on Printing; and that ten thou-
sand additional copies be printed and bound in cloth, of which two thousand five
hundred copies shall be for the use of the Senate and seven thousand five hundred
copies for the use of the House of Representatives; and that of the final report of said
commission one hundred thousand additional copies be printed, of which thirty thou-
sand copies shall be for the use of the Senate and seventy thousand copies for the
use of the House of Representatives: Provided, That the superintendent of documents
is hereby authorized to reprint copies of the same for sale or distribution as provided
by law.
Approved, April 28, 1916.
CONTEXTS OF VOLUME L
Page.
Final report of commission (see special table of contents, pp. 7-8) 5-269
Testimony taken .at hearings 271-1024
Suggestions of expert witnesses 273-398
J. D. Beck, member, Wisconsin Industrial Commission 278
C. W. Price, assistant to the Industrial Commission of Wiscon-
sin : 285
R. W. Campbell, chairman, central safety -committee, Illinois
Steel Co., Chicago 294
W. H. Cameron, secretary, National Council of Safety 307
Mrs. Raymond Bobbins, president, National Women's Trade-
Union, League : 309
John B. Andrews, secretary, American Association for Labor
Legislation 319
Herbert Quick, author and farmer 320
Charles W. Holman, University of Texas 333
John A. Fitch, industrial editor, "The .Survey" 334
William M. Leiserson, deputy, Industrial Commission of Wis-
consin 344
F. C. Croxton, president, American Association of Free Public
Employment Offices 357, 392
Edward T. Devine, Columbia University _ :_ 358
L. A. Halbert, superintendent, Kansas City Board of Public Wel-
fare 360, 364
James H. Boyd, ex-chairman, Employers' Liability Commission
of Ohio 370
Charles McCarthy, Legislative Reference Bureau of Wisconsin 377
Meyer Bloomfield, director, Vocational Bureau of Boston 390
Trade agreements in collective bargaining 399-761
John Mitchell, member, New York State Workingmen's Com-
pensation Commission.'; 401
Francis S. Peabody, coal operator 428
Frank J. Hayes, international vice president. United Miae Work-
ers of America 449
O. P. Briggs, ex-president, National Founders' Association- - 456,550
Joseph F. Valentine, president, International Molders' Union 481
Thomas J. Hogan, secretary Stove Founders' National Defense
Association 510
John P. Frey, executive officer and editor, International Mold-
ers' Union 524
Joseph Schaffner, secretary and treasurer, Hart, Schaffner &
Marx, Chicago 564, 574
Sidney Hillman, president, Cloak and Skirt Makers' Union, New
York 1 566
Earl Dean Howard, manager, labor department, Hart, Schaffner
& Marx, Chicago 571, 592
Julius Henry Cohen, counsel, Cloak,. Suit, and Skirt Manufac-
turers' Protective Association 575, 587
A. Bisno, chairman, educational committee, Cloak Makers' Union,
New York 579
James M. Lynch, commissioner of labor, State of New York 594
Albert W. Finlay, chairman, executive committee, United Ty-
pothetse of America — 609
George L. Berry, president, International Printing Pressmen and
Assistants' Union 620
Otto M. Eidlitz. general contractor, New York 644
3
4 CONTENTS OF VOLUME 1.
Testimony taken at hearings— Continued.
Trade agreements in collective bargaining — Continued. Page.
W. J. Spencer, building-trades department, American Federation
of Labor 659
Henry Struble, secretary, National Cut Stone Contractors' As-
sociation 665
Thomas J. Williams, president, building trades department,
American Federation of Labor .. 675
Edward A. Crane, architect, Philadelphia 681
Charles Francis president, Printers' League of America 683
J. E. Williams, mediator of labor disputes 697
W. L. Mackenzie King, former minister of labor, Ottawa, Can-
ada 713, 732
Samuel Gompers, president, American Federation of Labor___ 718, 738
James A. Emery, counsel, National Association of Manufac-
turers 724, 745
Exhibits, printing trades 748
Exhibits, building trades 760
Efficiency systems and labor 763-1024
Frederick W. Taylor, consulting engineer, Philadelphia 765, 795
John F. Tobin, president, Boot and Shoe Workers' Union, Boston- 810
Harrington Emerson, standard of practice and efficiency engi-
neer 822, 1021
Charles W. Mixter, time-study man Sentinel Automatic Gas Ap-
pliance Co., New Haven 835
Robert G. Valentine, industrial counselor 852
James M. Dodge, chairman, Link Belt Co., Philadelphia 862
P. J. Conlon, vice president, International Association of Ma-
chinists 873
David Van Alstyne, assistant to president, New York, New Haven
& Hartford Railroad 883
Carl G. Earth, consulting engineer, Philadelphia 886
A. J. Berres, secretary-treasurer, metal-trades department, Amer-
ican Federation of Labor 899
Sanford E. Thompson, consulting engineer, Boston 913, 928
N. P. Alifas, president, district No. 44, International Association
of Machinists 940
Henry Lawrence Gantt, consulting engineer, Montclair, N. J 955
James Duncan, president, Granite Cutters' International Associa-
tion of America 965
John Golden, president, United Textile Workers of America.. 985, 1012
Louis D. Brandeis, counselor at law, Boston 991
FINAL REPORT OF THE
COMMISSION ON
INDUSTRIAL RELATIONS
INCLUDING THE
REPORT OF BASIL M. MANLY, DIRECTOR
OF RESEARCH AND INVESTIGATION
AND THE
INDIVIDUAL REPORTS AND STATEMENTS
OF THE SEVERAL COMMISSIONERS
THE COMMISSION -OK INDUSTRIAL RELATIONS.
FRANK P. WALSH, Missouri, Chairman.
JOHN R. COMMONS, Wisconsin. S. THRUSTON BALLARD, Kentucky.
FLORENCE J. HARRIMAN, New York. JOHN B. LENNON, Illinois.
RICHARD H. AISHTON, Illinois.! JAMES O'CONNELL, District of Columbia.
HARRIS WEINSTOCK, California. AUSTIN B. GARRETSON, Iowa.
LEWIS K. BROWN, Secretary'
WILLIAM O. THOMPSON, Counsel.
BASIL M. MANLY, Director of Research and Investigation.
EXTRACT FROM ACT OF CONGRESS OF AUGUST 23, 1912, CREATING AND DEFINING
THE DUTIES OF THE COMMISSION ON INDUSTRIAL RELATIONS.
That a commission is hereby created to be called the Commission on Industrial
Relations. Said commission shall be composed of nine persons, to be appointed
by the President of the United States, by and with the advice and consent of the
Senate, not less than three of whom shall be employers of labor and not less than
three of whom shall be representatives of organized labor.
# * * # * . * *
SEC. 4. That the commission shall inquire into the general condition of labor in the
principal industries of the United States, including agriculture, and especially in those
which are carried on in corporate forms; into existing relations between employers
and employees; into the effect of industrial conditions on public welfare and into
the rights and powers of the community to deal therewith; into the conditions of
sanitation and safety of employees and the provisions for protecting the life, limb,
and health of the employees; into the growth of associations of employers and of wage
earners and the effect of such associations upon the relations between employers and
employees; into the extent and results of methods of collective bargaining; into any
methods which have been tried in any State or in foreign countries for maintaining
mutually satisfactory relations between employees and employers; into methods for
avoiding or adjusting labor disputes through peaceful and conciliatory mediation and
negotiations; into the scope, methods, and resources of existing bureaus of labor and
into possible ways of increasing their usefulness; into the question of smuggling or
other illegal entry of Asiatics into the United States or its insular possessions, and of
the methods by which such Asiatics have gained and are gaining such admission, and
shall report to Congress as speedily as possible, with such recommendation as said
commission may think proper to prevent such smuggling and illegal entry. The com-
mission shall seek to discover the underlying causes of dissatisfaction in the industrial
situation and report its conclusions thereon.
i Appointed commissioner Mar. 17, 1915, to serve the unexpired term of Hon. F. A. Delano, resigned.
6
CONTENTS OF FINAL REPORT.
Page.
Letter of transmittal 9
I.
REPORT OF BASIL M. MANLY, DIRECTOR OF RESEARCH AND INVESTIGATION, SIGNED BY COMMIS-
SIONERS WALSH, LENNON, O'CONNELL, AND GARRETSON 11-15 2
Letter of submittaL
Introduction 17
Method and character of investigation 19
Classification of witnesses upon industrial subjects 20
Summary of conclusions and recommendations 21-68
Labor conditions in the principal industries, including agriculture 21
Existing relations between employers and employees 25
Causes of industrial unrest 29
Unjust distribution of wealth and income 30
Unemployment and denial of opportunity to earn a living
Denial of justice 38
Denial of the right of organization 61
Conclusions and recommendations 68-152
I. Industrial conditions of adult workmen in general industries 68
Wages 68
Hours of labor 69
Safety and sanitation 69
Housing 70
II. Women and children in industry 71
III. Industrial conditions and relations on public utilities 73
General 73
Telegraph 74
Telephone 75
The Pullman Co 76
Eailroads , 77
IV. Industrial conditions in isolated communities 78
V. The concentration of wealth and influence 80
VI. The land question and the condition of agricultural labor 86
VII. Judicial settlement of labor claims and complaints 89
VIII. The law relating to trade unions and industrial disputes 90
IX. The policing ofindustry 92
The origin of industrial violence 92
State constabulary 97
Free speech 98
X. The conditions and problems of migratory laborers 101
XI. Unemployment 103
Extent and character of unemployment 103
Existing conditions of employment 106
Existing agencies for employment 108
Public employment agencies 112
XII. Organization, methods and policies of trade unions 115
XIII. Organization, methods and policies of employers' associations 117
XIV. Joint agreements 119
XV. Agencies of mediation, investigation, and arbitration 120
Proposed plan of a national system 121
Organization 121
Powers, duties, and jurisdiction 123
Cooperation 124
XVI. Industrial conditions and the public health— Sickness insurance 124
XVII Education in relation to industry. (See Report of Commissioner John B. Lennon
on Industrial Education, p. 253) 127
XVIII. Scientific management 127
Possible benefits to labor and society 128
Diversities and defects 129
General labor problems 139
Conclusions 143
XIX. Prison labor -. 143
XX. Immigration : 144
XXI. Labor conditions in American colonial possessions 145
XXII. Chinese exclusion '- 147
Constructive suggestions:
Changes in thelaw 147
United States commissioners 149
The judicial system
General administration 149
Selection of inspectors \
Chinese interpreters 150
Staff organization at Washington - - - 150
Salary plan 151
Restricting 152
7
8 CONTENTS OF FINAL REPORT.
Page.
SUPPLEMENTAL STATEMENT OF CHAIRMAN FRANK P. WALSH 153
SUPPLEMENTAL STATEMENT OF COMMISSIONER AUSTIN B. GARRETSON 158
SUPPLEMENTAL STATEMENT OF COMMISSIONERS JOHN B . LENNON AND JAMES O 'CONNELL 161
Criticisms not justified 161
Strong organizations the cure 162
The evidence 162
Extent of unrest 163
New governmental machinery unwise 164
The one true remedy 165
The public's duty 166
II.
REPORT OF COMMISSIONERS JOHNR. COMMONS AND FLORENCE J. HARRIMAN, SIGNED BY COMMIS-
SIONERS COMMONS, HARRIMAN, WEINSTOCK, B ALLARD, AND AISHTON 169-230
Enactment, interpretation, and enforcement of labor law 171
Industrial commissions 173
Advisory representative council 176
Civil service and comments on preceding paragraphs 180
Commissions and class conflicts 182
Investigations 191
Rules and regulations 195
Review by commission 198
Court review 199
Testimony 200
Continuous industry, employment and insurance 200
Police and military 201
Legal aid 202
Legislation 203
Supreme courts 204
Mediation and minimum wage 206
Trade disputes 214
Foundations 220
Subsidies 221
Federalfund for social welfare 221
Immigration 225
Farmers and farm laborers 226
Corporation eontrol 228
Dissenting opinion of Commissioner Harris Weinstock 230
REPORT .OF COMMISSIONERS WEINSTOCK, BALLARD, AND AISHTON:
Points of dissent 231
Employers' objection to organized labor, fear of—
Sympathetic strikes 235
Jurisdictional disputes 236
Labor union politics 237
Contract breaking 237
Restriction of output 238
Prohibition of use of nonunion-made tools and material 240
Closed shop 240
Contests for supremacy between rival unions 242
Acts of violence 242
Apprenticeship rules .• 246
SUPPLEMENTAL STATEMENT OF COMMISSIONER S. THRUSTON BALLARD 249
III.
REPORT OF COMMISSIONER JOHN B. LENNON ON INDUSTRIAL EDUCATION, SIGNED BY COMMISSIONERS
LENNON, O 'CONNELL, GARRETSON, BALLARD, AND WALSH 253-261
Demand for industrial education 255
Control of vocational schools 257
General recommendations 258
Continuation of part-time schools 259
Teachers 260
Conclusions 260
IV.
ADDITIONAL FINDINGS OF FACT, CONCLUSIONS, AND RECOMMENDATIONS 263-26')
LETTEE OF TEANSMITTAL.
COMMISSION ON INDUSTRIAL RELATIONS,
Chicago, III., August 23, 1915.
To the Sixty -fourth Congress:
On behalf of the Commission on Industrial Relations, I have the
honor to transmit herewith its final report.
The assembling of facts in the report of the staff from the records
of our public hearings and the reports of investigators, under the
direction of Mr. Basil M. Manly, might well be taken, in my opinion,
as a model of efficiency and scientific treatment by governmental
departments.
The plan of submitting none but undisputed facts in the final
report of the commission has been faithfully adhered to.
No statement or conclusion of fact adverse to the attitude or in-
terest of any person or group of persons is submitted, except as de-
clared or assented to by the person or by the individuals comprising
the group affected. Thus, for perhaps the first time in the history
of our Government, the facts in relation to conditions in the indus-
tries examined and the relations inquired into are placed beyond
the realm of controversy and established upon the solid and scientific
basis of ascertained and indisputable fact.
It is believed that the work of the commission has been conducted
in a spirit of social justice and an earnest desire to serve the public
by bringing into the light the facts regarding the industrial relations
of the country. For the creation of this spirit, as well as for an
earnest insistence that the education of the public should be the key-
note, I feel that full credit should be accorded Mr. George P. West,
and that in addition thereto he should be credited with the inspira-
tion and planning of many of the most effective public hearings of
the commission.
Respectfully,
FRANK P. WALSH, Chairman.
I.
Report of Basil M. Manly
Director of Research and Investigation
Embodying the Findings of Fact, Conclusions, and Recommendations
of the Staff, based upon their Investigations and the
Testimony of Public Hearings
SIGNED BY
Commissioners Walsh, Lennon, O'Connell, and Garretson
TOGETHER WITH
Supplemental Statements by Chairman Walsh, Commission-
ers Garretson, Lennon, and O'Connell
11
LETTER OF SUBMITTAL.
CHICAGO, ILL., August 9, 1915.
To the COMMISSION ON INDUSTRIAL RELATIONS :
I have the honor to submit herewith my report, which has been
prepared by direction of the commission as a summary and interpre-
tation of the evidence contained in the public hearings of the com-
mission and the reports of the staff, together with suggestions for
action designed to remedy such evils and abuses as have been de-
veloped by investigation.
In the preparation of this report I have directed my attention
primarily to the most important question placed before the commis-
sion by Congress, namely, " the underlying causes of dissatisfaction
in the industrial situation." I have, however, attempted to cover as
adequately as possible all the questions embodied in section 4 of
the act.
A few words with regard to the method of preparation may be of
value : The policy of the commission in intrusting certain important
subjects to the members of the staff for investigation under the gen-
eral supervision of the director has been continued throughout. The
members of the staff who had charge of definite subjects have made
their final reports embodying the results of their investigations and
the pertinent parts of the testimony before the commission. These
reports have, as far as possible, been accepted as the basis for the
statements and recommendations contained in this report. It is only
fair, however, to state that in certain respects they have been modi-
fied, largely as a result of the discussion which took place when these
reports were presented to the commission in tentative form. Never-
theless, in every case the substance and essential ideas of each in-
vestigator's report have been retained.
The enormous mass of testimony heard by the commission has
been drawn upon freely. In using this testimony I have iDeen guided
by the principle of quoting only statements made by the party to
whom such evidence would be unfavorable or by persons who were
clearly nonpartisan. For example, in the criticism of the attitude
and actions of employers only the testimony given by employers or
their agents has been quoted ; the testimony of labor representatives
being used only to show the attitude of the workers.
In addition, I have utilized to a very large extent the reports of
other governmental agencies, not only as sources of original informa-
tion but as a check upon the statements and conclusions contained
herein. In relation to a few subjects, indeed, the information al-
ready collected made it unnecessary for the commission to conduct
investigations of its own.
13
14 EEPOET OF COMMISSION ON INDUSTRIAL RELATIONS.
This report should properly be known as the report of the staff,
except that, as noted above, I feel it necessary to assume personal
responsibility for certain modifications which have been made from
the original reports. I wish to state, however, that I have drawn
most largely upon the following reports, which are submitted here-
with, with the suggestion that Congress be requested to print them
as supplements to this report : x
W. JETT LAUCK:
Analysis of Economic Causes of Unrest.
EDGAR SYDENSTRICKER :
Labor Conditions in American Industry.
CHRISTOPHER T. CHENERY:
The Telephone and Telegraph Industry.
Labor Conditions in Porto Rico,
MARIE L. OBENAUER:
Women in Industry.
Interstate Competition.
GERTRUDE BARNUM :
Enforcement of Laws Regulating Working Hours of Women In Wisconsin.
GEORGE P. WEST:
Labor Conditions in Colorado.
WILLIAM P. HARVEY :
Labor Conditions in the Black Hills.
Labor Conditions in Los Angeles.
CHARLES W. HOLMAN:
Preliminary Report on the Land Question.
JOHN L. COULTER:
Agricultural Labor and Tenancy.
WILLIAM M. LEISERSON :
Unemployment.
PETER A. SPEEK :
Conditions in Labor Camps.
Labor Complaints and -Claims.
Migratory Workers.
GEORGE E. BARNETT:
Joint Agreements.
GEORGE E. BASNETT and D. A. McCABE:
Mediation and Arbitration.
LEO WOLMAN:
Extent and Growth of Labor Organizations.
J. WALLACE BRYAN :
Trade-Union Law,
EDWIN E. WITTE:
Injunctions in Labor Disputes.
ROBERT F. HOXIE :
Scientific Management and Labor.
B. S. WARREN:
Industrial Conditions and the Public Health.
LUKE GRANT:
Violence in Labor Disputes aod the Policing of Industry.
The National Erectors' Association and the International Association of
Bridge and Structural Iron Workers.
REDMOND S. BRENNAN and PATRICK F, GHX:
The Inferior Courts and Police of Paterson, N. J.
EDWARD A. FITZPATRICK:
Chinese Exclusion.
In addition to those named above, the following members of the
staff, who have performed exceptional service and whose reports
have to some extent been used directly, should be mentioned : Henry
Wiiithrop Ballantine, Charles B. Barnes, Francis H. Bird, E. H.
1 These reports have not heen printed with this document, on the recommendation of
Chairman Frank P. Walsh, as stated in his letter in Senate Report No. 143, Sixty-fourth
Congress. The reports on Labor Conditions in Colorado and the National Erectors' Asso-
ciation were printed by the commission itself in 1915.
LETTER OF SUBMITTAL. 15
Busiek, W. J. Coyne, Nelle B. Curry, Alexander M. Daly, F. S.
Deibler, Noel T. Dowling, H. E. Hoagland, Carl Hookstadt, B. F.
Moore, Daniel T. O'Regan, M. O'Sullivan, Selig Perlman, Sumner
Slichter, George L. Sprague, and Inis Weed.
Special mention should be made also of Charles J. Stowell and
Elizabeth A. Hyde, whose work in research and in the digesting of
testimony has been invaluable.
— The success of the public hearings was due in large measure to the
courage, tact, and good humor of Thomas J. Egan, who performed
the difficult duties of sergeant at arms for the commission.
/ •' I wish to express my appreciation of the generous cooperation of
the secretary, Mr. Lewis K. Brown, upon whose executive ability and
tactful administration of the commission's affairs the work of the
1 staff in large measure depended. I wish also to express to the com-
, mission my acknowledgment and appreciation of the unusual free-
dom which has been accorded me in the administration of the work
of research and investigation, and in the conduct of the public
hearings.
Respectfully,*
BASH, M. MANLY, Director.
FINAL REPORT OF THE COMMISSION ON INDUSTRIAL
RELATIONS.
REPORT OF BASIL M. MANLY, DIRECTOR OF RESEARCH AND
INVESTIGATION.
INTRODUCTION.
The question of industrial relations assigned by Congress to the
commission for investigation is more fundamental and of greater
importance to the welfare of the Nation than any other question ex-
cept the form of our government. The only hope for the solution
of the tremendous problems created by industrial relationship lies
in the effective use of our democratic institutions and in the rapid
extension of the principles of democracy to industry.
The immediate effects of the form and character of industrial or-
ganization are, however, greater and closer to the lives and happi-
ness of all classes of citizens than even the form and character of
our political institutions. The ordinary man, whether employer
or worker, has relatively little contact with the Government. If he
and his family are well fed, well housed, and well clothed, and if he
can pay for the education of his children, he can exist even under
an autocratic monarchy with little concern, until some critical situa-
tion develops in which his own liberty is interfered with or until he
is deprived of life or property by the overwhelming power of his
tyrannical ruler. But his industrial relations determine every day
what he and his family shall eat, what they shall wear, how many
hours of his life he shall labor and in what surroundings. Under
certain conditions where his individual or corporate employer owns
or controls the community in which he lives, the education of his
children, the character and prices of his food, clothing, and house,
his own actions, speech, and opinions, and in some cases even his
religion, are controlled and determined, in so far as the interests of
the employer make it desirable for him to exercise such control.
Such conditions are established and maintained not only through the
dictation of all working conditions by the employer, but by his
usurpation or control of the functions and machinery of political
government in such communities.
In the available time it has been impossible to ascertain how gen-
eral such conditions are, but it is clearly indicated by the investiga-
tions that in isolated industrial, mining, or agricultural communi-
ties, which are owned or controlled by single individuals or corpora-
tions, and in which the employees are unorganized, industrial feu-
dalism is the rule rather than the exception.
38819°— 16 2 17
18 KEPORT OP COMMISSION ON INDUSTRIAL RELATIONS.
In such communities democratic government does not, as a rule,
exist, except in name or form, and as a consequence there now exist
within the body of our Republic industrial communities which are
virtually principalities, oppressive to those dependent upon them
for a livelihood and a dreadful menace to the peace and welfare of
the Nation.
Such conditions as these are the direct and inevitable consequence
of the industrial relations which exist in such communities. Politi-
cal freedom can exist only where there is industrial freedom ; politi-
cal democracy only where there is industrial democracy.
Such industrial democracy has been established in a greater or
less degree in certain American industries or for certain classes of
employees. But .between conditions of industrial democracy and
industrial feudalism there are almost infinite gradations marking
the stages of evolution which have been reached. In every case,
however, investigation has shown that the degree of political free-
dom and democracy which exists is conditioned by the industrial
status of the citizens who form the majority of the community.
The problems of industrial relations, therefore, demand the atten-
tion of Congress, not only because they' determine the life, security,
and happiness of the 25,000,000 citizens of the United States who
occupy the position of wage earners but because they affect for good
or evil the government of localities and States and to a smaller de-
gree that of the Nation itself. What each of these wage earners shall
eat, what he shall wear, where he shall live, and how long and under
what conditions he shall labor are determined by his industrial
status and by his relation, individually or collectively, to the person
or corporation employing him. Similarly and almost as directly,
this relationship determines whether the machinery of government
shall be used for or against his welfare ; whether his vote shall count
for or against his own interest ; whether he shall be tried by a jury
of his peers or a jury selected in collusion with the employing com-
pany, or, under conditions of so-called martial law, by no jury what-
ever ; whether, in fact, he shall be a free man or be deprived of every
right guaranteed by Federal and State constitutions, imprisoned
without warrant for the commission of crimes of which he may be
innocent or forcibly deported from the community or State in which
he has made his home. For these reasons it seems desirable at the
outset to suggest a recommendation to Congress that these problems
of industrial relationship should occupy their due prominence in the
deliberations of that honorable body, and that the entire machinery
of the Federal Government should be utilized to the greatest possible
degree for the correction of such deplorable conditions as have been
found to exist.
The lack of a proper industrial relationship and the existence of
bad labor conditions is a matter of the most serious moment during
times of peace, but the events of the past year have demonstrated
how enormously their menace to the welfare of a nation is increased
during a period of war. The present European war is being fought
on the farms and in the factories as much as in the trenches. The
effective mobilization of our industrial resources is as important,
simply from the standpoint of war, as is the mobilization of our mil-
itary and naval forces.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 19
It is equally important that action should be taken now, and not
after war is a reality.
An attempt has been made in the succeeding pages of this report
to suggest some of the measures which should be adopted, with a full
realization, however, that no action will be effective which does not
come through an understanding by the American people of the essen-
tial facts regarding industrial conditions. Practically there are only
two alternatives for effective action: First, the creation of a huge
system of bureaucratic paternalism such as has been developed in
Germany ; second, action which removes the many existing obstacles
which prevent effective organization and cooperation, reserving for
performance by the Government only those services which can not be
effectively conducted by voluntary organizations and those which
are of such vital importance to the entire Nation that they should
not be left to the hazard of private enterprise.
In closing this introductory statement it is proper to append a
quotation from Carlyle, the great Scotch historian, which contains
in a few eloquent sentences the very heart of the situation in Ameri-
can industry :
With the working people, again, it is not so well. Unlucky ! For there are
from twenty to twenty-five millions of them. Whom, however, we lump together
into a kind of dim compendious unity, * * *, as " the masses." Masses
indeed; and yet, singular to say, the masses consist of units, * * *, every
unit of whom has his own heart and sorrows ; stands covered there with his own
skin, and if you prick him he will bleed. Every unit of these masses is a mirac-
ulous man, even as thou thyself art ; struggling with vision or with blindness for
his infinite kingdom (this life which he has got once only in the middle of
eternities) ; with a spark of the divinity, what thou callest an immortal soul,
in him!
Clearly a difficult " point " for government, that of dealing with these masses ;
if indeed it be not rather the sole point and problem of government, and all
other points mere accidental crotchets, superficialities, and beatings of the
wind ! For let charter chests, use and wont, law common and special, say what
they will, the masses count to so many millions of units, made, to all appear-
ance, by God, whose earth this is declared to be.
METHOD AND CHARACTER OF INVESTIGATION.
In the investigation of questions so intimately affecting the lives
of a large part of the American people the ordinary methods of
compiling facts and drawing deductions would have been utterly
insufficient, not only because the ground to be covered was too ex-
tensive, but because the situation was too largely the result of the
opinions, beliefs, and convictions of employers and employees to be
susceptible of ascertainment by such a method. Furthermore, it
became clear very early in the investigation that the problems which
were presented could be solved only by the will arid conscience of
the American people acting either directly or through their repre-
sentatives in the State and Federal Governments.
The commission has therefore called before it witnesses represent-
ing persons drawn from almost every walk of life, whose knowledge
and opinions were believed to be of value. In order that the informa-
tion developed by these hearings should reach the people they were
not only held in public, but, through the newspapers, the facts de-
veloped by them have been carried throughout the Nation.
These hearings have occupied in all 154 days, or rather more than
the equivalent of 6 months of the commission's time. One or more
20 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
hearings were held in each of the following cities: Washington,
New York, Paterson, Philadelphia, Boston, Chicago, Lead (S. Dak.)?
Butte, Seattle, Portland, San Francisco, Los Angeles, Denver, and
Dallas. The witnesses, however, were by no means limited to these
localities, but in every case the best-informed persons were brought
to the centers at which the hearings were held.
The representative character of the witnesses may best be shown by
the statement on the following page.
Classification of ivitnesses upon industrial subjects.
Affiliated with employers :
Employers, managers, foremen, etc
Representatives of employers' organizations —
Attorneys 15
Efficiency engineers 10
Employment agents
Capitalists, bankers, directors, etc 20
230
Affiliated with labor :
Trades-union officials 135
Workingmen and working women 90
Attorneys 6
Industrial Workers of the World 8
Representatives of the Socialist Party G
245
Not affiliated with either group:
Agriculturists 22
Attorneys 15
Public officials 69
Representatives of civic organizations
Educators 22
Economists and sociologists 20
Investigators 11
Representatives of the press 14
Clergy 10
Physicians 7
Unclassified 17
On Chinese exclusion 84
265
Total 740
These witnesses were not arbitrarily selected by the commission,
but were chosen only after careful investigation by agents of the com-
mission, who consulted the persons best informed regarding the
industry, locality, or question under consideration. Every oppor-
tunity was given employers and employees to suggest the names of
witnesses who could best present their side of the case, and the per-
sons thus suggested were without exception heard with absolute free-
dom not only as regards time, but without regard to the technical
rules of evidence.
It seems desirable also to call attention to the fact that in this
report, except for citations from admittedly nonpartisan official
bodies, there are no statements of fact affecting any person or group
of persons which have not been submitted to the parties directly
concerned, or which have not been quoted from documents submitted
by them or from their public testimony. The submission of the facts
developed by preliminary investigation to the parties affected for
verification or correction at public hearings is believed to be the best
means of ascertaining the truth and avoiding evasion. The same is
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 21
true of the recommendations and conclusions contained in the report,
a very large number of which were submitted for criticism at public
hearings or by correspondence.
SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS.
In the act of Congress creating the commission, section 4 named
11 questions into which inquiry was specifically directed. Of these
questions three, relating to industrial conditions, industrial relations,
and the causes of industrial unrest, were fundamental in character
and of broad scope, while eight were specific and dealt more largely
with matters of detail. Leaving these eight specific questions for
detailed consideration in the body of the report, it seems desirable
to present briefly at this point the findings and conclusions with re-
gard to these general questions.
LABOR CONDITIONS IN THE PRINCIPAL INDUSTRIES, INCLUDING
AGRICULTURE.
In considering the conditions of labor in American industries, it
has seemed that they could be judged or appraised only by com-
paring conditions as they actually exist with what knowledge and
experience shows that they might easily be made during the im->
mediate future if proper action were taken to utilize the resources
of our Nation efficiently and distribute the products equitably.
As against this view there has been an attempt by some persons
to urge the judgment of all things by comparison with the past.
Much stress has been laid by certain witnesses upon the alleged im-
provement of the condition of the workers during the past quarter
century.
This point, however, is regarded as generally immaterial. The
crux of the question rather is, Have the workers received a fair
share of the enormous increase in wealth which has taken place in
this country, during the period, as a result largely of their labors?
The answer is emphatically, No !
The wealth of the country between 1890 and 1912 increased from
sixty-five to one hundred and eighty-seven billions, or 188 per cent,
whereas the aggregate income of wage earners in manufacturing,
mining, and transportation has risen between 1889 and 1909 only 95
per cent, from two thousand five hundred and sixteen millions in
1889 to four thousand nine hundred and sixteen millions in 1909.
Furthermore, the wage earners' share of the net product1 of in-
dustry in the case of manufactures was only 40.2 per cent in 1909,
as compared with 44.9 per cent in 1889.
Similarly, the attempt to dismiss deplorable labor conditions in
the United States by arguments that they are better than in Euro-
pean countries is repugnant. To say that conditions are better than
in Great Britain, for example, is simply to say that somewhat less
than one-third of the population is in a state of absolute poverty,
for that was the condition reported by the latest British commission
It should be a matter of shame also to boast that the condition of
1 The net product is the value that remains after subtracting the cost of materials from
the total value.
22 REPORT OP COMMISSION ON INDUSTRIAL RELATIONS.
American laborers is better than that of laborers in the " black bread
belt " of Germany.
That conditions are, as a matter of fact, but little better is proved
conclusively by the almost complete cessation of immigration from
Germany, England, and France. No better proof of the miserable
condition of the mass of American workers need be sought than the
fact that in recent years laborers in large numbers have come to
this country only from Russia, Italy, Austria-Hungary, and the
backward and impoverished nations of southern and eastern Europe*
With the inexhaustible natural resources of the United States, her
tremendous mechanical achievements, and the genius of her people
for organization and industry, there can be no natural reason to pre-
vent every able-bodied man of our present population from being
well fed, well housed, comfortably clothed, and from rearing a
family of moderate size in comfort, health, and security. How far
this ideal is actually achieved is discussed in some detail in the fol-
lowing pages.
It is evident both from the investigations of this commission and
from the reports of all recent governmental bodies that a large part
of our industrial population are, as a result of the combination of low
wages and unemployment, living in a condition of actual poverty.
How large this proportion is can not be exactly determined, but it
is certain that at least one-third and possibly one-half of the families
of wage earners employed in manufacturing and mining earn in the
course of the year less than enough to support them in anything like
a comfortable and decent condition. The detailed evidence is pre-
sented in a separate report which is submitted for transmittal to
Congress.1 At this point it is sufficient to call attention to the results
of the most exhaustive and sweeping official investigation of recent
years, that of the Immigration Commission, which reported to Con-
gress in 1909, This investigation secured detailed information re-
garding the daily or weekly earnings of 619,595 employees of all
classes in our basic manufacturing industries and in coal mining,
and information regarding income and living conditions for 15,726
families.
It was found that the incomes of almost two-thirds of these fam-
ilies (64 per cent) were less than $750 per year and of almost one-
third (31 per cent) were less than $500, the average for all being
$721. The average size of these families was 5.6 members. Elab-
orate studies of the cost of living made in all parts of the country
at the same time have shown that the very least that a family of five
persons can live upon in anything approaching decency is $700. It is
probable that, owing to the fact that the families investigated by the
Immigration Commission were, to a large extent, foreign born, the
incomes reported are lower than the average for the entire working
population ; nevertheless, even when every allowance is made for that
fact, the figures show conclusively that between one-half and two-
thirds of these families were living below the standards of decent
subsistence, while about one-third were living in a state which can
be described only as abject poverty.
American society was founded and for a long period existed upon
the theory that the family should derive its support from the earn-
1 Report of Edgar Sydenstricker : Labor Conditions in American Industries.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 23
ings of the father. How far we have departed from this condition
is shown by the fact that 79 per cent of the fathers of these families
earned less than $700 per year. In brief, only one-fourth of these
fathers could have supported their families on the barest subsist-
ence level without the earnings of other members of the family or
income from outside sources.
Other facts collected in this investigation show conclusively Jbhat
a very large proportion of these families did not live in decency
and comfort. Thirty per cent kept boarders and lodgers, a condition
repugnant to every ideal of American family life, especially in the
crowded tenements or tiny cottages in which the wage earners of
America characteristically live. Furthermore, in 77 per cent of the
families two or more persons occupied each sleeping room, in 37 per
cent three or more persons, and in 15 per cent four or more persons.
The most striking evidence of poverty is the proportion of pauper
burials. Th repugnance of all classes of wage earners of all races
to pauper burial is such that everything will be sacrificed and heavy
debts incurred rather than permit any member of the family to lie
in the " potter's field " ; nevertheless in New York City 1 out of every
12 corpses is buried at the expense of the city or turned over to
physicians for dissection.1
The terrible effects of such poverty may be outlined in a few para-
graphs, but their far-reaching consequences could not be adequately
shown in a volume.
Children are the basis of the State; as they live or die, as they
thrive or are ill nourished, as they are intelligent or ignorant, so
fares the State. How do the children of American workers fare ?
It has been proved by studies here and abroad that there is a
direct relation between poverty and the death rate of babies; but
the frightful rate at which poverty kills was not known, at least for
this country, until very recently," when through a study made in
Johnstown, Pa., by the Federal Children's Bureau, it was shown that
the babies whose fathers earned less than $10 per week died during
the first year at the appalling rate of 256 per 1,000. On the other
hand, those whose fathers earned $25 per week or more died at the
rate of only 84 per 1,000. The babies of the poor died at three times
the rate of those who were in fairly well-to-do families. The tremen-
dous significance of these figures will be appreciated when it is known
that one- third of all the adult workmen reported by the Immigration
Commission earned less than $10 per week, even exclusive of time
lost. On the showing of Johnstown these workmen may expect one
out of four of their babies to die during the first year of life.
The last of the family to go hungry are the children, yet statistics
show that in six of our largest cities from 12 to 20 per cent of the
children are noticeably underfed and ill nourished.
The minimum amount of education which any child should receive
is certainly the grammar school course, yet statistics show that only
one-third of the children in our public schools complete the grammar
school course, and less than 10 per cent finish high school.2 Those
1 Statistics for New York are the only ones available which are reasonably complete.
Even there not all are included who die in a state of extreme poverty, as it is well known
that national societies and sympathetic individuals claim a large number of bodies of
persons absolutely unknown to them.
8 Elimination of Pupils from School. Edward L. Thorndike. Bull. 379, TJ. S. Bureau of
Education.
24 REPORT OF COMMISSION ON" INDUSTRIAL RELATIONS.
who leave are almost entirely the children of the workers, who, as
soon as they reach working age, are thrown, immature, ill trained,
and with no practical knowledge, into the complexities of industrial
life. In each of four industrial towns studied by the Bureau of
Labor Statistics, more than 75 per cent of the children quit school
before reaching the seventh grade.1
Tlje great seriousness of this condition is even more acutely realized
when it is known that in the families of the workers 37 per cent of
the mothers are at work2 and consequently unable to give the chil-
dren more than scant attention. Of these mothers 30 per cent keep
boarders and lodgers and 7 per cent work outside the home.
As a final statement of the far-reaching effects of the economic
condition of American wage earners, it seems proper to quote the
following statement of the Chicago Commission on Crime, which
after thorough investigation, has reported during the past year :
The pressure of economic conditions has an enormous influence in producing
certain types of crime. Insanitary housing and working conditions, unemploy-
ment, wages inadequate to maintain a human standard of living, inevitably
produce the crushed or distorted bodies and minds from which the army of
crime is recruited. The crime problem is not merely a question of police and
courts; it leads to the broader problems of public sanitation, education, home
care, a living wage, and industrial democracy.8
The other factors in the conditions under which labor is employed
in American industry, such as working hours, regularity of employ-
ment, safety, and sanitation, are left for later discussion. Suffice
it to say in this connection that while in certain fields great improve-
ments have been made, the general situation is such that they accen-
tuate rather than relieve the deplorable effects of inadequate income
which have been pointed out.
As a picture of American industry, this presentation is undeniably
gloomy and depressing, but as a diagnosis of what is wrong with
American labor conditions, it is true and exact. There are, of course,
many bright spots in American industry, where workmen are well
paid and regularly employed under good working conditions in
the determination of which they have some share. But, even as the
physician pays little attention to the good eyes and sound teeth of
a patient whose vital organs are diseased, so impressive is the urgent
need for attention to the diseased spots in industry, it is felt to be
unnecessary to waste time in word pictures of conditions which are
all right or which may be depended upon to right themselves.
In agriculture there is no array of exact figures which can be quoted
to show the condition of labor. But, speaking generally, 'the available
evidence indicates clearly that while in some sections agricultural
laborers are well paid and fairly treated, the condition of the mass is
very much like that of the industrial workers.
Moreover, there is a peculiar condition in agriculture which merits
a brief but strong statement at this point as a preface to a more de-
tailed discussion later. The most alarming fact in American agri-
culture is the rapid growth of tenancy. In 1910 there were 37 tenant -
1 Conditions Under Which Children Leave School to Go to Work. Vol. VII of Report on
Conditions of Woman and Child Wage Earners in the United States. S. Doc. No. 645, 61st
Cong., 2d sess.
2 Summary Report on Immigrants in Manufacturing and Mining. Vols. 19 and 20 of
Reports of the Immigration Commission. S. Doc. No. 633, 61st Cong., 2d sess.
» Report of the City Council Committee on Crime, Chicago, Summary of Findings, sec. 14,
p. 12.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 25
operated farms in each 100 farms in the United States, as compared
with 28 in 1890, an increase of 32 per cent during 20 years. No
nation-wide investigation of the condition of tenant farmers has ever
been made, but in Texas, where the investigations of this commission
were thorough and conclusive, it was found not only that the economic
condition of the tenant was extremely bad but that he was far from
being free, while his future was regarded as hopeless. Badly housed,
ill nourished, uneducated, and hopeless, these tenants continue year
after year to eke out a bare living, moving frequently from one farm
to another in the hope that something will turn up. Without a large
family the tenant can not^hope to succeed or break even, so in each
tenant family numerous children are being reared to a future which
under present conditions will be no better than that of their parents,
if as good. The wife of a typical tenant farmer, the mother of 11
children, stated in her testimony before the commission that in addi-
tion to the rearing of children, making their clothes, and doing the
work of the house, she always helped with the crops, working up to
within three or four months before children were born, and that
during all the years of her married life she had had no ready-made
dresses and only three hats. The investigations of this commission
in that rich and generally prosperous section of the country only con-
firm and accentuate the statements of the Federal Industrial Com-
mission which reported in 1902 :
The result of this system [share tenancy] is that the renters rarely if ever
succeed in laying by a surplus. On the contrary, their experiences are so dis-
couraging that they seldom remain on the same farm for more than a year.
They are not only unable to lay by any money, but their children remain un-
educated and half clothed. The system is apparently one of the most undesira-
ble, so far as its effect on the community is concerned.1
Similarly, the Public Lands Commission reported in 1905 :
There exists and is spreading in the West a tenant or hired labor system
which not only represents a relatively low industrial development, but whose
further development carries with it a most serious threat. Politically, socially,
and economically this system is indefensible.
The condition of agricultural laborers can not, however, be dis-
missed without referring to the development of huge estates which
are operated by managers with hired labor on what may properly
be called a " factory system." The conditions upon such estates are
deplorable, not only because of the extremely low wages paid (80
cents per day in the case of one which was carefully investigated),
but even more because these estates, embracing within their bound-
aries entire counties and towns, are a law unto themselves and the
absolute dictators of the lives, liberties, and happiness of their em-
ployees. It is industrial feudalism in an extreme form. Such estates
are, as a rule, the property of absentee landlords, who are for the
most part millionaires, resident in the eastern States or in Europe.
EXISTING RELATIONS BETWEEN EMPLOYERS AND EMPLOYEES.
Considering the whole field of American industry, there are almost
infinite variations of relationship between employers and employees,
ranging from the individual worker hired by a single employer, as
1 Reports of the Industrial Commission, Vol. XIX, 1902, p. 98.
26 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
in domestic service and agriculture, to the huge corporation with
a hundred thousand stockholders and a quarter of a million em-
ployees. Relationship varies from that of direct contact to a situa-
tion where the employee, together with thousands of his fellow
workers, is separated by hundreds of miles from the individuals
who finally control his employment and of whose existence he is
usually entirely ignorant.
A thorough discussion of the relationships which exist under these
various forms of industrial organization would be not only tedious,
but useless for all practical purposes. The typical form of industrial
organization is the corporation. In transportation approximately
100 per cent of the wage earners are employed by corporations; in
mining, 90 per cent; and in manufacturing, 75 per cent. Moreover,
it is under this form that the great problems of industrial relations
have developed.
The actual relationship which exists between employers and em-
ployees under the artificial conditions which characterize the cor-
porate form of organization can not be understood without an
analysis of the powers, functions, and responsibilities of the different
elements which go to make up the typical corporation. The actual
ownership of a corporation is vested in the stockholders and bond-
holders, whose only interest in the industry is represented by cer-
tificates upon the basis of which they expect the payment of interest
or dividends at stated intervals.
The control of the property, as far as operation is concerned, rests
finally with the stockholders, or with some particular class of
stockholders whose shares entitle them to vote. The stockholders,
however, act through the board of directors, who are usually elected
in such a way that they represent only the dominant interest.1 As
far as the organization of the corporation is concerned, the prin-
cipal function of the board of directors is to select the executive
officials. These executive officials, either directly or indirectly, select
the numerous superintendents, foremen, and petty bosses by whom
the direct operation of the enterprise is managed and through whom
all the workers are hired, discharged, and disciplined.
This is a skeleton of corporate organization. To understand its
operations it is necessary to examine the functions and responsibili-
ties of the different parts of the organization.
Theoretically and legally, the final control and responsibility rests
with the stockholders, but in actual practice a very different situa-
tion is found. The relationship of stockholders to a corporation is
anything but permanent : in a busy week on Wall Street the number
of shares bought and sold in one of the great corporations will
greatly exceed the total number of shares that are in existence. The
stockholders as a class, therefore, have no guiding interests in the
permanent efficiency of the corporation as regards either the preser-
vation of its physical property or the maintenance of an efficient
productive organization. Stocks are bought either as a speculation
or as an investment, and in case either the physical property deteri-
orates or the productive organization tends to become inefficient, the
well-informed stockholder generally takes no steps to correct the
1 See the testimony of Mr. Jacob H. Schiff, Mr. Samuel Untermyer, and others upon thU
point.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 27
condition, but merely throws his stock upon the market. This marks
a very real and definite distinction from the actual ownership of a
property or business which must be kept in good condition by its
owner as regards b8th plant and organization. If all industries were
owned and operated by individuals, there might be some reason to
hope that generally satisfactory wages and physical conditions might
be attained through the education of the owner to a realization
th#t permanent success depended absolutely upon the maintenance
of the plant in the best condition and the permanent satisfaction of
the legitimate demands of the workers, but with the impersonal, re-
mote, and irresponsible status of control by stock ownership, such
a hope must be purely illusory. The ordinary stockholder in a
large corporation actually occupies a less direct relationship to the
corporation in which he is interested, has less knowledge of its actual
operations, and less control over its management than the ordinary
citizen has over local, State, and National Governments.
Boards of directors in theory are responsible for and would natur-
ally be expected to maintain supervision over every phase of the
corporation's management, but, as a matter of fact, we know that
such supervision is maintained only over the financial phase of the
business, controlling the acquisition of money to operate the busi-
ness and distributing the profits. Actual direction generally exists
only through the removal of executive officials who fail to deliver the
expected profits, and through the appointment of their successors.1
Upon the testimony of financiers representing, as directors, hun-
dreds of corporations, the typical director of large corporations is not
only totally ignorant of the actual operations of such corporations,
whose properties he seldom, if ever, visits, but feels and exercises no
responsibility for anything beyond the financial condition and the
selection of executive officials. Upon their own statements, these
directors know nothing and care nothing about the quality of the
product, the condition and treatment of the workers from whose
labor they derive their income, nor the general management of the
business.2
As far as operation and actual management are concerned, the
executive officials are practically supreme. Upon their orders pro-
duction is increased or decreased, plants are operated or shut down,
and upon their recommendations wages are raised or lowered. But
even they have little direct contact with the actual establishment of
working conditions, and no relation at all with the rank and file of
the workers. They act upon the recommendations of superintend-
ents, whose information comes from their assistants and foremen, and
from the elaborate statistics of modern business, which account for
every piece of material and product, show the disposition of every
penny that comes and goes, but ignore as though they did not exist
the men and women whose labor drives the whole mechanism of
business.
Here, then, is the field of industrial relations: Masses of workers
on the one side dealing in some manner with foremen and super-
intendents on the other, behind whom is an organization of execu-
1 See especially the testimony of Messrs. J. P. Morgan, John D. Rockefeller, jr., and
August Belinont upon this point.
* See the testimony of Messrs. Jacob H. Schiff, Daniel Guggenheim, Roger W. Babson,
and John D. Rockefeller, jr.
28 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
tive officials, representing in turn the board of directors, who are the
chosen representatives of the stockholders.
The crux of the whole question of industrial relations is: Shall
the workers for the protection of their interests be organized and
represented collectively by their chosen delegates, even as the stock-
holders are represented by their directors and by the various grades
of executive officials and bosses?
In considering this issue the first question that presents itself is,
Why should such representation be demanded as a necessity? Not
only are the executive officials, superintendents and bosses, some wit-
nesses have urged before the commission, for the most part humane
and well-intentioned men, but they know that the interests of the
business depend upon the welfare of the workers and, if unhindered,
will pay the best wages and create the best working conditions that
the business can afford. Organization and representation are there-
fore argued to be unnecessary and tending only to promote friction
and interfere with the management of the business.
Let us grant the high character and good intentions of officials
and consider the statement of the workers in reply.
They say that in modern corporate business the actions of officials
are governed not by their personal intentions, but by the inexorable
demands for interest and dividends, and are driven not by their de-
sire to create a permanently successful business with a contented
labor force, but by the never-relaxed spur of the comparative cost
sheet. The constant demand is for high production at low cost, not
through improvements and good conditions which might give them
next year, but this very month. In the high pressure of business
every superintendent knows that if his plant is at the bottom of the
comparative scale for two months his position topples, and if for
three months it is virtually gone. He can not afford to experiment
with changes that will not give immediate results. If he were his
own master he might take a chance, knowing that the loss of this
year would be compensated by gains under better conditions next
year, but the monthly cost sheet does not wait for next year; it de-
mands results now.
But it may be said that if he can not improve conditions himself
he can at least recommend them to his superiors, to be transmitted
to the board of directors for approval. This might indeed be done,
and with the extension of an understanding among managers that low-
production costs may be secured with high wages, probably would be to
an increasing extent, except that boards of directors scorn such ab-
stractions as the high-wage-low-cost theory and habitually insist that
managers shall buy labor, as they buy material, in the cheapest mar-
ket. Moreover, raising wages is traditionally unpopular among
stockholders and directors, and recommendations for better condi-
tions, particularly if they involve new capital, are frowned upon.1
Neither the stockholders nor the directors have to live on wages or
work in the existing surroundings, and profits deferred are con-
sidered profits lost.
The workers, therefore, deny the potency of even good intentions
on the part of managers and point to labor history, which they
1 See the discussion in the 1915 stockholders' meeting of the United States Steel Corpo-
ration which was devoted almost exclusively to the question whether the corporation, at an
expense of a few thousand dollars, should continue to send a copy of the annual report to
each stockholder of record.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 29
allege shows that at best only isolated cases can be pointed out
where marked improvements have taken place except in response to
repeated demands from the workers or to forestall the growth of
threatened organization. They point also to such facts as that chil-
dren of 12 years or younger were not only employed in the factories
(as they still are in some States where there has been little aggressive
agitation), but almost without exception were insisted upon by the
employers as a necessity.
The evidence of this character, which is summarized elsewhere,
seems to be conclusive of the necessity for organization and repre-
sentation under modern business conditions. But even if it were not
necessary it is difficult to see any reason why what is demanded and
required by stockholders should be denied to workers. It would be
as illogical for stockholders individually to attempt to deal with the
representatives of the unions as it is for the individual worker to
attempt to deal with executive officials representing the organized
stockholders.
CAUSES OF INDUSTRIAL UNREST.
It is presumed that Congress had in mind, in directing the commis-
sion to inquire into the "causes of dissatisfaction in the industrial
situation," something far different from that " dissatisfaction with
the present which is the hope of the future," that desire for better
things which drives men forever forward. Such dissatisfaction is
the mainspring of all progress and is to be desired in every nation
in all walks of life.
It is believed that Congress intended the inquiry to be directed to
that unrest and dissatisfaction which grows out of the existence of
intolerable industrial conditions and which, if unrelieved, will in the
natural course of events rise into active revolt or, if forcibly sup-
pressed, sink into sullen hatred.
Of the existence of such unrest ample evidence has been found.
It is the basis of the establishment and growth of the I. W. W., whose
card-carrying members number only a few thousands, but which as
" a spirit and a vocabulary " permeates to a large extent enormous
masses of workers, particularly among the unskilled and migratory
laborers. But entirely apart from those who accept its philosophy
and creed, there are numberless thousands of workers, skilled and
unskilled, organized and unorganized, who feel bitterly that they
and their fellows are being denied justice, economically, politically,
and legally. Just how widespread this feeling is or whether there
is imminent danger of a quickening into active, nation-wide revolt,
none can say. But no one who reads the papers from which the
workers get their ideas and inspiration ; no one who has studied with
care the history of such strikes as those at Lawrence and Paterson,
in West Virginia and Colorado, and has understood the temper of
the strikers ; no one who has associated with large numbers of work-
ers in any part of the country, can fail to be impressed by the gravity
of the situation. ,
This sense of tension and impending danger has been expressed by
numerous witnesses before the commission, but by none more forcibly
than by Mr. Daniel Guggenheim, a capitalist whose interests in mines
and industrial plants extend to every part of the country.
30 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
Chairman WALSH. What do you think has been accomplished by the philan-
thropic activities of the country in reducing suffering and want among the
people?
Mr. GUGGENHEIM. There has a great deal been done. If it were not for what
has been done and what is being done, we would have revolution in this
country.
The sources from which this unrest springs are, when stated in full
detail, almost numberless. But upon careful analysis of their real
character they will be found to group themselves almost without
exception under four main sources which include all the others.
The four are :
1. Unjust distribution of wealth and income.
2. Unemployment and denial of an opportunity to earn a living.
3. Denial of justice in the creation, in the adjudication, and in
the administration of law.
4. Denial of the right and opportunity to form effective organi-
zations.
1. UNJUST DISTRIBUTION OF WEALTH AND INCOME.
The conviction that the wealth of the country and the income
which is produced through the toil of the workers is distributed
without regard to any standard of justice is as widespread as it is
deep-seated. It is found among all classes of workers and takes every
form from the dumb resentment of the day laborer, who, at the end of
a week's back-breaking toil finds that he has less than enough to feed
his family while others who have done nothing live in ease, to the
elaborate philosophy of the " soap-box orator," who can quote statistics
unendingly to demonstrate his contentions. At bottom, though,
there is the one fundamental, controlling idea that income should be
received for service and for service only, whereas, in fact, it bears
no such relation, rand he who serves least, or not at all, may receive
most.
This idea has never been expressed more clearly than in the testi-
mony of Mr. John H. Walker, president of the Illinois State Fed-
eration of Labor :
- A workingman is not supposed to ask anything more than a fair day's wage
for a fair day's work ; he is supposed to work until he is pretty fairly tuckered
out, say eight hours, and when he does a fair day's work he is not supposed
to ask for any more wages than enough to support his family, while with the
business man the amount of labor furnishes no criterion for the amount they
receive. People accept it as all right if they do not do any work at all, and
accept it as all right that they get as much money as they can; in fact, they
are given credit for getting the greatest amount of money with the least
amount of work; and those things that are being accepted by the other side
as the things that govern in every-day life, and as being right, have brought
about this condition, this being in my judgment absolutely unfair; that is,
on the merits of the proposition in dealing with the workers.
The workers feel this, some unconsciously and some consciously, but all of
them feel it, and it makes for unrest, in my judgment, and there can be no peace
while that condition obtains.
In the highest paid occupations among wage earners, such as
railroad engineers and conductors, glass blowers, certain steel-mill
employees, and a few of the building trades, the incomes will range
from $1,500 to $2,000 at best, ignoring a few exceptional men who
are paid for personal qualities. Such an income means, under pres-
ent-day conditions, a fair living for a family of moderate size, edu-
cation of the children through high school, a small insurance policy,
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 31
a bit put by for a rainy day — and nothing more. With unusual re-
sponsibilities or misfortunes, it is too little, and the pinch of neces-
sity is keenly felt. To attain such wages, moreover, means that the
worker must be far above the average, either in skill, physical
strength, or reliability. He must also have served an apprenticeship
equal in length to a professional course. Finally, and most im-
portant, he or his predecessors in the trade must have waged a long,
aggressive fight for better wages, for there are other occupations
whose demand for skill, strength, and reliability are almost as great
as those mentioned, where the wages are very much less.
These occupations, however, include but a handful compared to
the mass of the workers. What do the millions get for their toil,
for their skill, for the risk of life and limb? That is the question
to be faced in an industrial nation, for these millions are the back-
bone and sinew of the State, in peace or in war.
First, with regard to the adult workmen, the fathers and potential
fathers, from whose earnings, according to the " American standard,"
the support of the family is supposed to be derived.
Between one-fourth and one-third of the male workers 18 years
of age and over, in factories and mines, earn less than $10 per week ;
from two-thirds to three-fourths earn less than $15, and only about
one-tenth earn more than $20 a week. This does not take into con-
sideration lost working time for any cause.
Next are the women, the most portentously growing factor in the
labor force, whose wages are important, not only for their own sup-
port or as the supplement of the meager earnings of their fathers
und husbands, but because, through the force of competition in a
rapidly extending field, they threaten the whole basis of the wage
scale. From two-thirds to three-fourths of the women workers in
factories, stores and laundries, and in industrial occupations gen-
erally, work at wages of less than $8 a week. Approximately one-
fifth earn less than $4 and nearly one-half earn less than $6 a week.
Six dollars a week — what does it mean to many? Three theater
ticketSj gasoline for the week, or the price of a dinner for two; a
pair of shoes, three pairs of gloves, or the cost of an evening at
bridge. To the girl it means that every penny must be counted,
every normal desire stifled, and each basic necessity of life barely
satisfied by the sacrifice of some other necessity. If more food must
be had than is given with 15-cent dinners, it must be bought with
what should go for clothes ; if there is need for a new waist to replace
the old one at which the forewoman has glanced reproachfully or at
which the girls have giggled, there can be no lunches for a week and
dinners must cost 5 cents less each day. Always too the room must
be paid for, and back of it lies the certainty that with slack seasons
will come lay-offs and discharges. If the breaking point has come,
and she must have some amusement, where can it come from? Surely
not out of $6 a week.
Last of all are the children, for whose petty addition to the stream
of production the Nation is paying a heavy toll in ignorance, deformity
of body or mind, and premature old age. After all, does it matter
much what they are paid? For all experience has shown that in
the end the father's wages are reduced by about the amount that
the children earn. This is the so-called " family wage," and examin-
ation of the wages in different industries corroborates the theory
32 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
that in those industries, such as textiles, where women and children
can be largely utilized, the wages of men are extremely low.
The competitive effect of the employment of women and children
upon the wages of men, can scarcely be overestimated. Surely it is
hard enough to be forced to put children to work, without having
to see the wages of men held down by their employment.
This is the condition at one end of the social scale. What is at
the other?
Massed in millions, at the other end of the social scale, are fortunes
of a size never before dreamed of, whose very owners do not know the
extent nor, without the aid of an intelligent clerk, even the sources of
their incomes. Incapable of being spent in any legitimate manner,
these fortunes are burdens, which can only be squandered, hoarded,
put into so-called " benefactions " which, for the most part, constitute
a menace to the State, or put back into the industrial machine to pile
up ever-increasing mountains of gold.
In many cases, no doubt, these huge fortunes have come, in whole
or in part, as the rich reward of exceptional service. None would
deny or envy him who has performed such service the richest of re-
wards, although one may question the ideals of a Nation which re-
wards exceptional service only by burdensome fortunes. But such
reward can be claimed as a right only by those who have per-
formed service, not by those who through relationship or mere para-
sitism chance to be designated as heirs. Legal right, of course, they
have by virtue of the law of inheritance, which, however, runs counter
to the whole theory of American society, and which was adopted,
with important variations, from the English law, without any con-
ception of its ultimate results and apparently with the idea that it
would prevent exactly the condition which has arisen. In effect the
American law of inheritance is as efficient for the establishment and
maintenance of families as is the English law, which has bulwarked
the British aristocracy through the centuries. Every year, indeed,
sees this tendency increase, as the creation of " estates in trust "
secures the ends which might be more simply reached if there were
no prohibition of " entail." According to the income-tax returns for
10 months of 1914, there are in the United States 1,598 fortunes yield-
ing an income of $100,000 or more per year. Practically all of these
fortunes are so invested and hedged about with restrictions upon
expenditure that they are, to all intents and purposes, perpetuities.
An analysis of 50 of the largest American fortunes shows that
nearly one-half have already passed to the control of heirs or to
trustees (their vice regents) and that the remainder will pass to the
control of heirs within 20 years, upon the deaths of the " founders."
Already, indeed, these founders have almost without exception re-
tired from active service, leaving the management ostensibly to their
heirs but actually to executive officials upon salary.
We have, according to the income-tax returns, 44 families with
incomes of $1,000,000 or more,1 whose members perform little or no
useful service, but whose aggregate incomes, totaling at the very
least $50,000,000 per year, are equivalent to the earnings of 100,000
wage earners at the average rate of $500.
The ownership of wealth in the United States has become concen-
trated to a degree which is difficult to grasp. The recently published
1 The income tax statistics, as a matter of fact, cover only a period of 10 months in 1914.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 33
researches of a statistician of conservative views1 have shown that
as nearly as can be estimated the distribution of wealth in the United
States is as follows:
The " rich," 2 per cent of the people, own 60 per cent of the wealth.
The " middle class," 33 per cent of the people, own 35 per cent of
the wealth.
The "poor," 65 per cent of the people, own 5 per cent of the wealth.
This means in brief that a little less than 2,000,000 people, who
would make up a city smaller than Chicago, own 20 per cent more
of the Nation's wealth than all the other 90,000,000.
The figures also show that with a reasonably equitable division of
wealth, the entire population should occupy the position' of comfort
and security which we characterize as middle class.
The actual concentration has, however, been carried very much
further than these figures indicate. The largest private fortune in
the United States, estimated at $1,000,000,000, is equivalent to the
aggregate wealth of 2,500,000 ^ of those who are classed as "poor,"
who are shown in the studies cited to own on the average about $400
each.
Between the two extremes of superfluity' and poverty is the large
middle class — farmers, manufacturers, merchants, professional men,
skilled artisans, and salaried officials — whose incomes are more or
less adequate for their legitimate needs and desires, and who are
rewarded more or less exactly in proportion to service. They have
problems to meet in adjusting expenses to income, but the pinch of
want and hunger is not felt, nor is there the deadening, devitalizing
effect of superfluous, unearned wealth.
From top to bottom of society, however, in all grades of incomes,
are innumerable number of parasites of every conceivable type.
They perform no useful service, but drain off from the income of the
producers a sum whose total can not be estimated.
This whole situation has never been more accurately described
than by Hon. David Lloyd-George in an address on " Social waste " :
I have recently had to pay some attention to the affairs of the Sudan, in
connection with some projects that have been mooted for irrigation and develop-
ment in that wonderful country. I will tell you what the problem is — you may
know it already. Here you have a great, broad, rich river upon which both the
Sudan and Egypt depend for their fertility. There is enough water in it to
fertilize every part of both countries; but if, for some reason or other, the
water is wasted in the upper regions, the whole land suffers sterility and
famine. There is a large region in the upper Sudan where the water has been
absorbed by one tract of country, which, by this process, has been converted
into a morass, breeding nothing but pestilence. Properly and fairly husbanded,
distributed, and used, there is enough to fertilize the most barren valley arid
make the whole wilderness blossom like the rose.
That represents the problem of civilization, not merely in this country but in
all lands. Some men get their fair share of wealth in a land and no more —
sometimes even the streams of wealth overflow to waste over some favored
regions, often producing a morass, which poisons the social atmosphere. Many
have to depend on a little trickling runlet, which quickly evaporates with every
commercial or industrial drought; sometimes you have masses of men and
women whom the flood at its height barely reaches, and then you witness
parched specimens of humanity, withered, hardened in misery, living in a desert
where even the well of tears has long ago run dry.
1 Prof. Willard I. King, The Wealth and Income of the People of the United States.
38819°— 16 3*
34 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
Besides the economic significance of these great inequalities of
wealth and income, there is a social aspect which equally merits the
attention of Congress. It has been shown that the great fortunes of
those who have profited by the enormous expansion of American in-
dustry have already passed, or will pass in a few years, by right of
inheritance to the control of heirs or to trustees who act as their
" vice regents." They are frequently styled by our newspapers
"monarchs of industry," and indeed occupy within our Eepublic a
position almost exactly analogous to that of feudal lords.
These heirs, owners only by virtue of the accident of birth, control
the livelihood and have the power to dictate the happiness of more
human beings than populated England in the Middle Ages. Their
principalities, it is true, are scattered and, through the medium of
stock ownership, shared in part with others; but they are none the
less real. In fact, such scattered invisible industrial principalities
are a greater menace to the welfare of the Nation than would be equal
power consolidated into numerous petty kingdoms in different parts
of the country. They might then be visualized and guarded against ;
now their influence invisibly permeates and controls every phase of
life and industry.
" The king can do no wrong," not only because he is above the law
but because every function is performed or responsibility assumed by
his ministers and agents. Similarly our Rockefellers, Morgans,
Fricks, Vanderbilts, and Astors can dp no industrial wrong, because
all effective action and direct responsibility is shifted from them to
the executive officials who manage American industry. As a basis
for this conclusion we have the testimony of many, among which,
however, the following statements stand out most clearly :
Mr. John D. Rockefeller, jr.:1
* * * Those of us who are in charge there elect the ablest and most
upright and competent men whom we can find, in so far as our interests give
us the opportunity to select, to have the responsibility for the conduct of the
business in which we are interested as investors. We can not pretend to follow
the business ourselves.
Mr. J. Pierpont Morgan :
Chairman WALSH. In your opinion, to what extent are the directors of cor-
porations responsible for the labor conditions existing in the industries in which
they are the directing power?
Mr. MOBGAN. Not at all I should say.
The similitude, indeed, runs even to mental attitude and phrase.
Compare these two statements:
Mr. John D. Rockefeller, jr. :
My appreciation of the conditions surrounding wage earners and my sympathy
with every endeavor to better these conditions are as strong as those of any
man.
Louis XVI:
There is none but you and me that has the people's interest at heart. (" II
n'y a que vous et moi aimions le peuple.")
The families of these industrial princes are already well estab-
lished and are knit together not only by commercial alliances but by
a network of intermarriages which assures harmonious action when-
ever their common interest is threatened.
1 Before congressional investigating committee.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 35
Effective action by Congress is required, therefore, not only to
readjust on a basis of compensation approximating the service actu-
ally performed, the existing inequalities in the distribution of
wealth and income, but to check the growth of an hereditary aris-
tocracy, which is foreign to every conception of American Govern-
ment and menacing to the welfare of the people and the existence of
the Nation as a democracy.
The objects to be attained in making this readjustment are: To
reduce the swollen, unearned fortunes of those who have a super-
fluity ; to raise the underpaid masses to a level of decent and comfort-
able living ; and at the same time to accomplish this on a basis which
will, in some measure, approximate the just standard of income pro-
portional to service.
The discussion of how this can best be accomplished forms the
greater part of the remainder of this report, but at this point it
seems proper to indicate one of the most immediate steps which
need to be taken.
It is suggested that the commission recommend to Congress the
enactment of an inheritance tax, so graded that, while making gen-
erous provision for the support of dependents and the education of
minor children, it shall leave no large accumulation of wealth to pass
into hands which had no share in its production.1 The revenue
from this tax, which we are informed would be very great, should
be reserve.d by the Federal Government for three principal purposes :
1. The extension of education.
2. The development of other important social services which,
should properly be performed by the Nation, which are discussed in
detail elsewhere.
3. The development, in cooperation wivh States and municipali-
ties, of great constructive works, such as road building, irrigation,
and reforestation, which would materially increase the efficiency and
welfare of the entire Nation.
We are informed by counsel not only that such a tax is clearly
within the power of Congress, but that upon two occasions, namely,
during the Civil War and in 1898, such graded inheritance taxes
were enacted with scarcely any opposition and were sustained by the
Supreme Court, which held that the inheritance tax was not a direct
tax within the meaning of the Constitution. We are aware that
similar taxes are levied in the various States, but the conflict with
such State taxes seems to have presented little difficulty during the
period in which the tax of 1898 was in effect. Under any circum-
stances this need cause no great complication, as the matter could be
readily adjusted by having the Federal Government collect the en-
tire tax and refund a part to the States on an equitable basis.
There is no legislation which could be passed by Congress the
immediate and ultimate efforts of which would be more salutary or
would more greatly assist in tempering the existing spirit of unrest.
2. UNEMPLOYMENT AND DENIAL OF OPPORTUNITY TO EARN A LIVING.
As a prime cause of a burning resentment and a rising feeling of
unrest among the workers, unemployment and the denial of an op-
1 It is suggested that the rates be so graded that not more than $1,000,000 shall pass to
the heirs. This can be equitably accomplished by several different gradations of taxation.
36 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
portunity to earn a living is on a parity with the unjust distribution
of wealth. They may on final analysis prove to be simply the two
sides of the same shield, but that is a matter which need not be dis-
cussed at this point. They differ in this, however, that while un-
just distribution of wealth is a matter of degree, unemployment is
an absolute actuality, from which there is no relief but soul-killing
crime and soul-killing charity.
To be forced to accept employment on conditions which are insuffi-
cient to maintain a decent livelihood is indeed a hardship, but to be
unable to get work on any terms whatever is a position of black
despair.
A careful analysis of all available statistics shows that in our great
basic industries the workers are unemployed for an average of at
least one-fifth of the year, and that at airtimes during any normal
year there is an army of men, who can be numbered only by hundreds
of thousands, who are unable to find work or who have so far degen-
erated that they can not or will not work. Can any nation boast of
industrial efficiency when the workers, the source of her productive
wealth, are employed to so small a fraction of their total capacity ?
Fundamentally, this unemployment seems to rise from two great
causes, although many others are contributory. First, the inequality
of the distribution of income which leaves the great masses of the
population (the true ultimate consumers) unable to purchase the
products of industry which they create, wrhile a few have such a super-
fluity that it can not be normally consumed but must be invested in
new machinery for production or in the further monopolization of
land and natural resources. The result is that in mining and other
basic industries we have an equipment in plant and developed prop-
erty far in excess of the demands of any normal year, the excess being,
in all probability, at least 25 per cent. Each of these mines and
industrial plants keeps around it a labor force which, on the average,
can get work for only four-fifths of the year, while at the same time
the people have never had enough of the products of those very indus-
tries— have never been adequately fed, clothed, housed, nor warmed —
for the very simple reason that they have never been paid enough to
permit their purchase.
The second principal cause lies in the denial of access to land and
natural resources even when they are unused and unproductive, ex-
cept at a price and under conditions which are practically prohibi-
tive. This situation, while bound up with the land and taxation
policies of our States and Nation, also rests fundamentally upon the
unjust distribution of wealth. Land or mineral resources in the
hands of persons of average income must and will be used either by
their original owners or by some more enterprising person. By the
overwhelming forces of economic pressure, taxation, and competi-
tion they can not be permitted to lie idle if they will produce any-
thing which the people need. Only in the hands of large owners —
free from economic pressure, able to evade or minimize the effects
of taxation and to awrait the ripening of the fruits of unearned in-
crement— can land be held out of use if its products are needed.
There can be no more complete evidence of the truth of this state-
ment than the condition of the farms of 1,000 acres and over, which,
valued at two and one-third billion dollars, comprise 19 per cent of
all the farm land of the country and are held by less than 1 per cent
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 37
*
of the farm owners. The United States census returns show that
in these 1,000-acre farms only 18.7 per cent of the land is cultivated
as compared with 60 to 70 per cent in farms of from 50 to 499 acres.
Furthermore, it is well known that the greater part of these smaller
farms which are left uncultivated are held by real estate men, bank-
ers, and others wrho have independent sources of income. More than
four-fifths of the area of the large holdings is being held out of active
use by their 50,000 owners, while 2,250,000 farmers are struggling
for a bare existence on farms of less than 50 acres, and an untold
number who would willingly work these lands are swelling the
armies of the unemployed in the cities and towns.
A basic theory of our Government, which found expression in the
homestead acts, was that every man should have opportunity to secure
land enough to support a family. If this theory had been carried
out and homesteads had either gone to those who would use them
productively or remained in the hands of the Government, we should
not yet have a problem of such a character. But these acts were
evaded; land was stolen outright by wholesale^ and fraudulent en-
tries were consolidated into enormous tracts which are now held by
wealthy individuals and corporations.
The Public Lands Commission, after an exhaustive inquiry, re-
ported in 1905 :
Detailed study of the practical operation of the present land laws shows that
their tendency far too often is to bring about land monopoly rather than to
multiply small holdings by actual settlers.
* * * Not infrequently their effect is to put a premium on perjury and
dishonest methods in the acquisition of land. It is apparent, in consequence,
that in very many localities, and perhaps in general, a larger proportion of the
public land is passing into the hands of speculators than into those of actual
settlers making homes. * * * Nearly everywhere the large landowner
has succeeded in monopolizing the best tracts, whether of timber or agricul-
tural lands.
To one who has not read the preceding statements carefully there
may seem to be a contradiction in proposing to prevent great capi-
talists from creating an excess of productive machinery and over-
developing mineral resources while pointing out the necessity of
forcing land and other natural resources into full and effective use
by the people. The two propositions are, as a matter of fact, as
fundamentally distinct as monopoly and freedom. The capitalist
increases his holdings in productive machinery and resources only
because through monopolization and maintenance of prices he hopes
to reap rewards for himself or increase his power, while the aim
in desiring the full development of land and other resources by the
people is that they, producing for themselves, may enjoy a sufficiency
of good things and exchange them for the products of others, and
thus reduce to a minimum the condition of unemployment.
There are, of course, many other causes of unemployment than the
inequality of wealth and the monopolization of land which there is
no desire to minimize. Chief among these are immigration, the inade-
quate organization of the labor market, the seasonal character of
many industries, and the personal deficiencies of a very large num-
ber of the unemployed. It can not be denied that a considerable
proportion of the men who fill the city lodging houses in winter are
virtually unemployables as a result of weakness of character, lack
1 S. Doc. 154, 58th Cong., 3d sess., p. 14.
38 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
of training, the debasing effects of lodging-house living and city
dissipation, and, last but not least, the conditions under which they
are forced to work in the harvest fields and lumber, railroad, and
construction camps. The seasonal fluctuations of our industries are
enormous, employing hundreds of thousands during the busy season
and throwing them out on the community during the dull season,
and almost nothing has been done to remedy this condition. It would
be difficult to imagine anything more chaotic and demoralizing than
the existing methods of bringing workmen and jobs together. Cer-
tain measures for dealing with these conditions, which are discussed
elsewhere in the report, need to be pushed forward with all possible
vigor. But it may be confidently predicted that the unemployment
situation will not be appreciably relieved until great advances have
been made in the removal of the two prime causes — unjust distribu-
tion of wealth and monopolization of land and natural resources.
The most direct methods of dealing with the inequality of wealth
have already been briefly discussed and will be considered elsewhere
in the report. With respect to the land question, however, the fol-
lowing basic suggestions are submitted :
1. Vigorous and unrelenting prosecutions to regain all land, water
power, and mineral rights secured from the Government by fraud.
2. A general revision of our land laws, so as to apply to all future
land grants the doctrine of "superior use," as in the case of water
rights in California, and provision for forfeiture in case of actual
nonuse. In its simplest form the doctrine of " superior use " implies
merely that at the time of making the lease the purpose for which
the land will be used must be taken into consideration, and the use
which is of greatest social value shall be given preference.
3. The forcing of all unused land into use by making the tax on
nonproductive land the same as on productive land of the same
kind and exempting all improvements.
Other measures for dealing with unemployment are discussed
under that head on pages 103-115.
The unemployed have aptly been called "the shifting sands be-
neath the State." Surely there is no condition which more immedi-
ately demands the attention of Congress than that of unemploy-
ment, which is annually driving hundreds of thousands of other-
wise productive citizens into poverty and bitter despair, sapping the
very basis of our national efficiency, and germinating the seeds of
revolution.
3. DENIAL OF JUSTICE.
No testimony presented to the commission has left a deeper im-
pression than the evidence that there exists among the workers an
almost universal conviction that they, both as individuals and as a
class, are denied justice in the enactment, adjudication, and adminis-
tration of law, that the very instruments of democracy are often
used to oppress them and to place obstacles in the way of their
movement toward economic, industrial, and political freedom and
justice. Many witnesses, speaking for millions of workers as well
as for themselves, have asserted with the greatest earnestness that
the mass of the workers are convinced that laws necessary for their
protection against the most grievous wrongs can not be passed ex-
cept after long and exhausting struggles ; that such beneficent meas-
REPORT OF COMMISSION OX INDUSTRIAL RELATIONS. 39
ures as become laws are largely nullified by the unwarranted deci-
sions of the courts ; that the laws which stand upon the statute books
are not equally enforced; and that the whole machinery of Gov-
ernment has frequently been placed at the disposal of the employers
for the oppression of the workers; that the Constitution itself has
been ignored in the interests of the employers; and that constitu-
tional guaranties erected primarily for the protection of the workers
have been denied to them and used as a cloak for the misdeeds of
corporations.
If it be true that these statements represent the opinions of the
mass of American workers, there is reason for grave concern, for
there are 25,000,000 of them, of whom 3,000,000 are welded together
into compact organizations.
But if it be true that these charges are justified; if, in fact, our
legislators, our judges, and executives, do not afford equal considera-
tion to the workers and are concerned with protecting the rights of
property rather than the rights of men, and at times even become
the instruments for the oppression of the poor and humble, then the
situation demands and must receive the prompt and decisive action
of every right-thinking man in order that these evils may be eradi-
cated and justice and liberty established in the place of injustice
and oppression.
Before examining the evidence, it should be understood that it is
not charged that such acts of injustice are universal, but that they
occur so frequently and in such diverse parts of the country that
any man may reasonably fear that he himself or those with whom
he is associated may at any time be the victim of injustice or dis-
crimination. It has been urged, and perhaps properly, that the
charges would be sustained if it were found that such acts of injus-
tice had been committed only upon rare occasions, if it should also
be established that such injustices were allowed to stand without
redress, and if those who were guilty of their commission were left
unimpeached and unpunished.
An enormous mass of evidence bearing upon these charges has
been presented to the commission by witnesses or collected by its
staff. This material is presented in some detail in another part of
the report, but the summary which follows may be regarded as rea-
sonably full and exact.
First, with regard to the enactment of laws, it is charged that the
workers have been unable to secure legislation to protect them against
griev.ous wrongs, except after exhausting struggles against over-
whelming odds and against insidious influences.
The evidence bearing upon this question has dealt with the his-
tory of three principal lines of legislation in which the evils sought
to be remedies are now universally admitted to have been Very great,
involving wanton destruction of life, the exploitation of women
and children, and the practical enslavement of American seamen.
A careful examination has been made of the history of attempts to
secure adequate legislation to prevent child labor, to protect women
against extreme hours of labor and night work, to secure the safety
of factories, railroads, and mines, and to provide for the safety, com-
fort, and liberty of seamen.
The history of child-labor legislation shows that although agita-
tion for the protection and education of children began during the
40 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
early part of the nineteenth century in Massachusetts, Rhode Island,
Connecticut, New York, and Pennsylvania, no adequate legislation
was obtained until nearly the end of the century. Time after time
in each of these industrial States the sentiment of the public was
aroused, organization was effected, and well-drafted bills were intro-
duced only to be killed in committee, emasculated or killed on the
floor of the legislature, or passed with exceptions which rendered
them entirely ineffective. Even the attempt to reduce the hours of
children below 12 per day was bitterly contested and met by every
known trick of legislative chicanery. The wThole history of the con-
test for adequate child-labor legislation is even now being repeated
in some of the Southern States, where laws prohibiting the employ-
ment of children are bitterly contested and beaten session after ses-
sion by legislators, unsympathetic or controlled by the cotton-mill
interests.
Similarly, although the movement to restrict the working hours
of women and to prohibit night work began in Massachusetts' and
Pennsylvania as early as 1840, the first legislation limiting the hours
was the 10-hour bill passed in Massachusetts in 1874, and night work
went unregulated until the passage of the act of 1899 in Nebraska.1
The movement for safety of life and limb in the factories and
workshops, although pushed with great vigor in almost every session
of the State legislatures after 1880, secured only a few acts providing
for such obvious matters as the guarding of set screws and gears,
but made practically no provision for their enforcement. No really
effective -action to promote safety took place until, after many years
of hard fighting, the first workmen's compensation acts were passed
between 1900 and 1910, which for the first time made the unsafe con-
dition of factories directly expensive.
Even upon the railroads, where the safety of the public as well as
of the workers was involved, at least 10 years of constant agitation
on the part of the railroad brotherhoods and various interested citi-
zens was necessary before the first Federal act providing for safety
appliances was passed in 1893.
In the case of the movement to secure the safety, comfort, and
liberty of seamen, it is a matter of record that Andrew Furuseth,
president of the seamen's union, backed not only by all the members
of his own organization but by the entire American labor move-
ment, attended each session of Congress and devoted his whole ener-
gies to securing legislation upon this subject for the entire period of
22 years from 1893 to 1915, when the seamen's bill finally became a
law.
Other evidence has been presented covering the long fights to
secure legislation to remove the evils of company stores, payment in
scrip, prison labor, arbitrary deductions from wages, " sweating,"
tenement houses, and a number of other matters upon which ade-
1 It is worthy of note that although the decision on the Massachusetts law was favorable
and thus established a precedent (Commonwealth v. Hamilton Mfg. Co., 120 Mass., ::8:;». it
was thrown aside by the Illinois court in 1895 in holding unconstitutional a law of that
State prescribing an 8-hour day for women (Ritchie v. People, 155 111., 98), and it was not
until 1910 that the same court accepted a 10-hour law as constitutional (Ritchie v.
Wyman, 244 111., 509). The Nebraska statute limited the hours of women to 10 a day and
prohibited night work between the hours of 10 p. m. and 6 a. m., but the first case did not
raise the question of night work (Wenham v. State, 65 Neb., 394). In New York, however,
a statute regulating night work was held unconstitutional in 1907 (People v. Williams, 189
N. Y., 131 , and it was not until the present year that a similar law was sustained (People
v. Schweinler Press, 214 N. Y., 395).
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 41
quate legislation has not yet been secured, except perhaps in a few
States, although there has been unremitting agitation upon these
questions for more than half a century. This evidence shows clearly
that the workers have just grounds for the charge that the legisla-
tures have been criminally slow in acting for the relief of grievous
wrongs and have used every subterfuge to escape adequate and
aggressive action, even while thousands of men, women, and children
were being killed, maimed, or deformed as a result of their negli-
gence.
Evidence has further been presented to show that such a condition
has not been the result entirely of the complacency or slothfulness
of legislators, but that powerful influences have been at work to
prevent such remedial legislation. The most convincing evidence
presented upon this phase of the question is the record of the Na-
tional Association of Manufacturers and its allied organizations, as
contained in the testimony and findings before congressional com-
mittees,1 in the printed reports of that association and in the testi-
mony before the commission of the representatives of various State
employers' associations. The substance of this evidence is so well
known to Congress and to the public that it is necessary here to call
attention only to the fact that the efforts of such associations in
preventing the enactment of practically all legislation intended to
improve the condition or advance the interests of workers were not
confined to Congress, but were even more effective in the State
legislatures.
The persistent and bitter manner in which the railroads fought
the laws providing for safety appliances, although the measures were
moderate and necessary, not only for the safety of the traveling
public, but for the efficient operation of the roads, is well known to
Congress.
Perhaps the most significant statement regarding the insidious
influences of this character is contained in a letter from Mr. L. M.
Bowers, chairman of the board of directors of the Colorado Fuel &
Iron Co., to the Secretary of Mr. John D. Rockefeller, jr., under date
of May 13, 1913 :
The Colorado Fuel £ Iron Co. for many years were accused of being the
political dictator of southern Colorado, and, in fact, were a mighty power in
the entire State. When I came here it was said that the C. F. & I. Co. voted
every man and woman in their employ without any regard to their being nat-
uralized or not, and even their mules, it used to be remarked, were registered
if they were fortunate enough to possess names. Anyhow, a political depart-
ment was maintained at a heavy expense. I had before me the contributions
of the C. F. & I. Co. for the campaign of 1904, amounting to $80,605, paid out
personally by President Hearne. All the vouchers and checks I have examined
personally, all of which were payable to Albert A. Miller, upon which he drew
the currency and, it is said, handed the money over to Mr. Hearne, who paid
it out. So far as I can discover, not one particle of good was accomplished for
the company, but Mr. Hearne was an aspirant for the position of United Spates
Senator and devoted a vast amount of time and money with this end in view, I
have no doubt.
The company became notorious in many sections for their support of the
liquor interests. They established saloons everywhere they possibly could.
1 U. S. Senate Committee on Judiciary. Maintenance of a Lobby to Influence Legisla-
tion. Hearings before a subcommittee pursuant to S. Res. 92, 63d Cong., 1st sess.
Charges Against Members of the House and Lobby Activities of the National Association
of Manufacturers of the United States and Others. Hearings before select committee of
House of Representatives appointed under H. Res. 198, 63d Cong., 1st sess.
42 EEPOKT OF COMMISSION ON INDUSTKIAL RELATIONS.
This department was managed by one John Kebler, a brother of the one-time
president of the company, who died about the time I came here, a victim of hia
own intemperate habits. A sheriff, elected by the votes of the G. P. & I. Co.
employees, and who has been kept in office a great many years, established him-
self or became a partner in 16 liquor stores in our coal mines. To clean up the
saloons and with them the gambling hells and houses of prostitution has been
one of the things that Mr. Welborn and I have devoted an enormous amount of
time to during the past five years. The decent newspapers everlastingly lam-
pooned the C. F. & I. Co. at every election, and I am forced to say the company
merited, from a moral standpoint, every shot that was fired into their camp.
Since I came here 1 not a nickel has been paid to any politician or political
party. We have fought the saloons with all the power we possess. We have
forbidden any politician from going into our camps, and every subordinate offi-
cial connected with the company has been forbidden to influence our men to
vote for any particular candidate. We have not lobbied in the legislature, but
have gone directly to the governor and other able men and have demanded fair
treatment.
Second, it is charged by the workers that after wholesome and
necessary laws are passed they are in large part nullified by the courts
either upon technicalities of a character which would not be held to
invalidate legislation favorable to the interests of manufacturers,
merchants, bankers, and other property owners, or thrown out on the
broad ground of unconstitutionally, through strained or illogical
construction of constitutional provisions. It is argued that such
action is doubly evil, because the power to declare legislative acts
unconstitutional has been assumed by the courts in the face of a
complete absence of legal sanction, in complete disregard of early
decisions denying the possession of such power, and in complete con-
trast to the practices of the courts in every other country of the
civilized world. It is not within our province to decide whether or
not this assumption of power by the courts was justified. It is suffi-
cient here merely to examine the evidence bearing upon the allega-
tions that laws necessary for the correction of grave industrial abuses
are nullified by strained interpretations or for reasons which would
be insufficient in other cases, and that they are held unconstitutional
upon pretexts which in reality are the outgrowth of economic bias
on the part of the judges.
A large number of decisions illustrating these points have been
brought to the attention of the commission, but only a few need be
cited here. It has been held, for example, even that statutes requiring
dangerous machinery to be guarded may be disobeyed by the em-
ployer, and children employed about such unguarded machinery
are held to have assumed the risk.2 The same has been held regarding
the employment of women.3
Many other cases might be cited on the question of strained in-
terpretation,4 bearing out the assertion made by Justice Lurton, of
1 This statement of Mr. Bowers should be considered in conjunction with his testimony
that the evil influences created by the Colorado Fuel & Iron Co. were still in power and his
admission that the company was deeply interested in the last State election and that 150
men were put into the field from his office alone to work for the candidates favored by the
company, which was deeply interested in the election of officials who would vigorously
Srosecute the strikers. His letters narrating how the governor of Colorado was whipped
ato line should also be considered, as well as the testimony of Dr. B. S. Gaddis, former
head of the sociological department of the Colorado Fuel & Iron Co., that officials openly
influenced elections.
2 Higgins v. O'Keefe, 79 Fed., 900 ; White v. Wittemann Lith. Co., 131 N. ¥., 631.
3 Knisley v. Pratt, 148 N. Y., 372.
* Nappa v. Erie Ry. Co., 195 N. Y,, 176, 184 ; Gallagher v. Newman, 190 N. Y., 444,
447-448 ; Cashman v. Chase, 156 Mass., 342 ; Quinlan v. Lackawanna Steel Co., 107 A. D.
176, affirmed 191 N. Y./329 ; Finnigan v. N, Y. Contracting Co., 194 N. Y., 244.
BEPOKT OF COMMISSION- ON INDUSTRIAL RELATIONS. 43
the Federal Supreme Court, when, in a case not involving industrial
relations, he says:
The judgment just rendered will have, as I think, the effect to defeat the
clearly expressed will of the legislature by a construction of its words that
can not be reconciled with their ordinary meaning.1
Probably there are no other cases which have created so much
bitterness as those of personal injury in which the plaintiffs have
been denied recovery of damages on the principles of " fellow serv-
ant," " assumption of risk," and " contributory negligence," and the
obstacles which have been created by the courts to prevent the re-
moval of these defenses for the employer have served only to in-
tensify the feeling. The contrast in attitude of the judges can not
better be shown than by considering that while they have held each
employee of a corporation responsible under these three principles
not only for his own involuntary acts but for the physical condition
of the entire property and the conduct of each of his fellow workers,
they have repeatedly absolved officials, directors, and stockholders
from responsibility for accidents, even when the unsafe condition of
the property had been published, or when orders had been issued
which were directly responsible for the accidents. It would hardly
be an exaggeration to say that, if the courts had held officials and
directors to as great a degree of responsibility as employees for the
condition of the property and the actions of their agents, there is
hardly one who would have escaped punishment for criminal negli-
gence. According to the best estimates, approximately 35,000 per-
sons were killed last year in American industry, and at least one-
half of these deaths were preventable.2 What would be the situation
if the courts, following the clear logic of their own decisions, should
hold the stockholders, directors, and officials criminally responsible
for each of the 17,500 preventable deaths to which attention has time
after time been directed? >
That the courts, including even the highest tribunal of the Nation,
do allow their economic bias to influence them in holding laws' uncon-
stitutional is nowhere more clearly expressed than in the dissenting
opinion of Mr. Justice Holmes in the case of Lochner v. New York,3
wherein the right of the Legislature of New York to limit the hours
of work in bakeries was involved. He said :
This case is decided upon an economic theory which a large part of the
country does not entertain. If it were a question whether I agree with that
theory [limiting the consecutive hours of labor in bakeries which may be re-
quired of an employee], I should desire to study it further and long before
making up my mind. But I do not conceive that to be my duty, because I
strongly believe that my agreement or disagreement has nothing to do with the
right of a majority to embody their opinions in law.
* * * Some of these laws [referring to several which he has discussed]
embody convictions or prejudices which judges are likely to share. Some may
not, but a constitution is not intended to embody a particular economic theory,
whether of paternalism and the organic relation of the citizen to the State, or
of laissez faire. It is made for people of fundamentally differing views, and
the accident of our finding certain opinions natural and familiar or novel, and
even shocking, ought not to conclude our judgment upon the question whether
statutes embodying them conflict with the Constitution of the United States.
1 Thompson v. Thompson, 218 U. S., 611.
2 Industrial Accident Statistics, Bui. Whole No. 157, U, S. Bureau of Labor Statistics,
1915.
3 Lochner v. N. Y., 198 TJ. S., 45.
44 BEPOET OF COMMISSION ON INDUSTRIAL RELATIONS.
This statute of the State of New York, which had been sustained
by the courts of New York, was thus held unconstitutional, we are
assured by the highest possible authority, on the economic theories
of five judges, whose bias is clearly reflected in the majority opinion.
By that action not only were the bakers of New York deprived of all
legal relief from the hardships of working long hours in under-
ground bakeries, but the entire movement for relieving the condition
of other workmen in similarly unhealthful occupations throughout
the country was effectually checked for a decade. Can these judges,
the workers ask, absolve themselves from responsibility for the
thousands of lives wrhich have been shortened as a result of their
decisions, the ill health and suffering of other thousands who con-
tracted disease as a result of unduly long exposure to bad conditions
and a lack of sufficient fresh air and leisure ? The provision of the
Constitution which was held to be violated by this act was the four-
teenth amendment, designed solely to protect the emancipated
negroes.
The wide range of the labor laws declared unconstitutional may be
seen from the following list, which includes only those cases which
may be clearly understood from their titles :
LABOR LAWS DECLARED UNCONSTITUTIONAL.
Requiring statement of cause of discharge.1
Prohibiting blacklisting.2
Protecting workmen as members of labor unions.3
Restricting power of courts to grant injunctions, etc.4
Protecting employees as voters (Federal).5
Forbidding public employment office to furnish names of applicants to em-
ployers whose workmen were on strike.6
Fixing rates of wages on public works.7
Regulating weighing of coal at mines (four States).8
Providing for small attorneys' fees in successful actions to recover wage
claims.'
Fixing the time of payment of wages.10
Prohibiting use of " scrip." 1
Prohibiting or regulating company stores."
Fixing hours of labor in private employment.13
Defining liability of employers for injuries."
It is difficult to find parallel cases to illustrate the difference in
the point of view assumed by the courts upon the same constitutional
question according to economic or social results of the decisions in
1 Wallace <v. G. C. & N. R. Co., 94 Ga., 732.
2 Wabash R. Co. v. Young, 162 Ind., 102.
State
' 4 Pierce v 'stablemen's Union, 156 Cal., 70 ; State v. Shepherd, 177 MoM 234 ; Cheadle v.
State, 110 Ind., 301.
6 United States 7\ Amsden, 1 Bissell, 283.
6 Mathews v. People. 202 111., 389.
7 Street v. Varney Electrical Supply Co., 160 Ind., 338.
8 Harding v. People, 160 111., 459 ; in re Preston, 63 Ohio St., 428 ; Com. v. Brown, 8 Pa.
Super. Ct., 339 ; In re House Bill No. 203, 21 Colo., 27.
» Randolph v. Builders' and Painters' Supply Co., 106 Ala., 501 ; Builders' Supply Depot
v. O'Connor, 150 Cal., 265; Davidson v. Jennings, 27 Colo., 187; Manowsky v. Stephan,
233 111., 409.
10 Republic Iron & Steel Co. v. State, 160 Ind., 379 ; Braceville Coal Co. 17. People, 147 111.,
66 ; Johnson v. Goodyear Mining Co., 127 Cal., 4.
11 Godcharles v. Wigeman, 113 Pa. Si., 431 ; Jordan v. State, 51 Texas Cr. App., 531.
12 Frorer v. People. 141 111., 171 ; State v. Fire Creek Coal & Coke Co., 33 W. Va., 188.
13 In re Morgan, 26 Colo., 415 ; Lochner v. New York, 198 U. S., 45 ; Low u. Rees Printing
Co.. 41 Nebr., 127 ; Ritchie v. People, 155 111., 98 ; People v. Williams, 189 N. Y., 131.
14 B:illard v. Mississippi Cotton Oil Co., 81 Miss., 507 ; Baltimore & O. S. W. R. Co. v.
Read, 158 lud., L'5.
KEPOBT OF COMMISSION ON INDUSTRIAL RELATIONS. 45
different cases. There are a few clear-cut cases, however, in which
the contrast is plainly shown, as, for example, in the inconsistency
between the decisions in the Debs case,1 wherein it is held that the
control of Congress over interstate commerce is so complete that it
may regulate the conduct of the employees engaged therein to the
extent of enjoining them from going on a sympathetic strike, and the
decision in the Adair case,2 wherein it is held that Congress has so
little power over the conduct of those engaged in interstate commerce
that it can not constitutionally forbid employers engaged therein
discharging their employees merely because of membership in a
labor union.
In this same connection it is proper to contrast the almost uniform
prohibition by the State and Federal courts of secondary boycotts
in labor cases even to the extent of enjoining the publication of " un-
fair lists," with the decision in the case of Park Co. v. Druggists'
Association (175 N. Y.). In this case the Park Co. charged that the
Druggists' Association fixed prices of proprietary medicines; that
they refused to sell to anyone who did not abide by the prices thus
fixed ; that the druggists combined in this association refused to sell
to the Park Co. ; and that they used spies to ascertain with whom the
Park Co. did business with intent to compel such customers to cease
doing business with the Park Co. The facts were admitted on de-
murrer, but the court refused to issue an injunction, holding that the
bo}Tcott was caused by plaintiff himself and could be removed when-
ever he saw fit to abide by the association's rules ; and, further, that
there was no conspiracy. If the same line of reasoning were fol-
lowed in labor cases, it is difficult to imagine any kind of boycott
which would be illegal.
Finally, reference should be made to the history of the fight for
the enactment of eight-hour legislation in Colorado, which illustrates
the grounds upon which the workers not only of that State, but
throughout the Nation, distrust legislatures, courts, and executive
officials.
Although the 8-hour day was established in Colorado gold mines
by agreement among the operators after the Cripple Creek strike
of 1894, in the coal-mining industry a 20-year struggle followed the
miners' first attempt at legislation.
The eight-hour bill presented to the general assembly in 1895,
though supported by the Western Federation of Miners, the United
Mine Workers of America, and labor organizations in general, was,
upon reference to the Supreme Court for an advance opinion, re-
ported as unconstitutional and failed of enactment.
A bill brought successfully to enactment in 1899, and which was
substantially a copy of the Utah law upheld by State and Federal
Supreme Courts, was declared by the Colorado Supreme Court to be
unconstitutional.3
In 1901 the people adopted by an overwhelming vote an amend-
ment to the constitution which provided for eight-hour legislation.
This was followed by the introduction in the next general assembly
(1903) of several bills, and by the inauguration of active opposition
thereto on the part of corporations. No fewer than 11 anonymous
bulletins were attributed to one officer of a smelting company.
1 158 TJ. S., 564. 2 208 U. S., 161. 3 In re Morgan, 26 Colo., 415.
46 REPORT OF COMMISSION OK INDUSTRIAL RELATIONS.
On account of disagreements in conference, none of the several
bills passed ; and so great was the public outcry that at the extra ses-
sion in July, 1903, each house passed resolutions blaming the other
for the failure.
In the session of 1904-5 a bill substantially the same as the present
law, and favored by all political parties, was so amended by Mr.
Guggenheim as to be " absolutely worthless." It remained on the
statute books, a dead letter, until 1911.
In 1911, house bill No. 46 was passed. The operators succeeded
in having it submitted to a referendum vote, and at the last moment
they initiated a smelterman's eight-hour bill, the two came up on
the same ballot, and in the succeeding confusion both were adopted
by the people, because of their genuine interest in the passage of an
eight-hour law.
The legislature of 1913 repealed both the laws so enacted in 1911,
and reenacted house bill No. 46, the present law. By a decision of
the Supreme Court, allowing a "safety clutch," this law may not
be referred.
The essential injustice and stupidity of this long fight of the em-
ployers against eight-hour legislation is strikingly shown by a letter
from Mr. L. M. Bowers, chairman of the board of directors of the
Colorado Fuel & Iron Co., to Mr. J. D. Rockefeller, jr.. stating that
after they saw that such legislation was inevitable, they tried out
the eight-hour day in their mines and found that it was economically
profitable. The Colorado Fuel & Iron Co. thereby is shown to have
stubbornly resisted by every conceivable device, for a period of 20
years, a just law which was not only necessary for the health and
welfare of its 12,000 miners but was actually profitable for the com-
pany itself.
The reason for the effectiveness of the opposition of the Colorado
Fuel & Iron Co. is also shown in the letter quoted on page 41 from
Mr. Bowers to the secretary of Mr. Rockefeller, describing the com-
plete and corrupt control which the company exercised over the
State government during this period.
Third, it is alleged by the workers that in the administration of
law, both common and statute, there is discrimination by the courts
against the poor and in favor of the wealthy and powerful. It is
further stated that this discrimination arises not only from the eco-
nomic disabilities of the poor, which render them unable to employ
equally skillful lawyers, to endure the law's delay, and to stand the
expense of repeated appeals, but out of an actual bias on the part
of the judges in favor of the wealthy and influential. It should
arouse great concern if it be true that the courts do not resolve their
doubts in favor of the poor and humble; how much graver then is
the injustice if the judges do in fact lean toward the rich and
mighty ?
To establish this claim by the presentation of a sufficient number
of cases would be a tedious task. Many such have been presented to
the commission but can not be considered fully here. Instead, it
would seem that in such cases we may safely rely upon the uncon-
tra dieted opinion of weighty authorities whose position removes
from them any suspicion of bias.
BEPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 47
Ex-President William H. Taft has said:
We must make it so that the poor man will have as nearly as possible an
equal opportunity in litigating as the rich man; and under present conditions,
ashamed as we may be of it, this is not the fact.
Prof. Henry E. Seager, of Columbia University, testified before
the commission:
I don't see how any fair-minded person can question but what our judges
have shown a decided bias in favor of the employers. I would not be inclined
to ascribe this so much to a class bias, although I think this is a factor, as to
the antecedent training of judges. Under our legal system the principal task
of the lawyer is to protect property rights, and the property rights have come
to be concentrated more and more into the hands of corporations, so that the
successful lawyer of to-day, in a great majority of cases, is the corporation
lawyer. His business is to protect the rights of employers and corporations.
It is from the ranks of successful lawyers, for the most part, that our judges
are selected, and from that results inevitably a certain angle on the part of a
majority of our judges.
The bias of the courts is nowhere more clearly shown than in cases
involving persons and organizations with whose economic and social
views the court does not agree. An interesting example may be cited
in the case of Warren v. United States, 183 Fed., 718, where the
editor of Appeal to Reason, Fred D. Warren, was sentenced by the
Federal district court to six months' imprisonment and a fine of $1,500
for the circulation through the mails of matter offering a reward to
anyone who would kidnap a certain governor for whom extradition
had been refused.1
The sentence was commuted by President Taft, against the protest
of Warren, to a fine of $100 to be collected in a civil suit. In com-
menting on the sentence, President Taft is reported to have said :
The district court evidently looked beyond the record of the evidence in this
case and found that Warren was the editor and publisher of a newspaper en-
gaged in a crusade against society and government.
Moreover, this is not a prosecution for criminal libel ; it is a prosecution for
what at best is the violation of a regulation as to the use of the mails. To
visit such an offense with a severe punishment is likely to appear to the public
to be an effort to punish the defendant for something that could not be charged
in the indictment.
This obviously was not intended as a reflection upon the court,
but the attitude of a large part of the workers is that if President
Taft was justified in making such an assertion it was a case demand-
ing impeachment of the judges involved rather than a commutation
of sentence for Warren.
Fourth, it is charged by the representatives of labor not only that
courts have neglected or refused to protect workers in the rights
guaranteed by the Constitution of the United States and of the
several States, but that sections of the Constitution framed primarily
to protect human rights have been perverted to protect property
rights only and to deprive workers of the protection of rights se-
cured to them by statutes.
First, with regard to the Federal courts, it is startling and alarm-
ing to citizens generally, and particularly to workers, to learn that
the concensus of Federal decisions is to the effect that the sections
of the Constitution defining the rights of citizens to trial by jury,
1 It was alleged by Warren that this was done to call attention to the gross dis-
crimination in the case of Haywood and Moyer, who were kidnaped aud transported from
one State to another.
48 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
security from unwarranted arrest and search, free speech, free
assembly, writ of habeas corpus, bearing of arms, and protection
from excessive bail and cruel and unusual punishments, apply only
to Federal jurisdiction and in reality protect the citizen only against
the action of the Federal Government. The only sections protect-
ing the personal rights of citizens under ordinary circumstances
are the thirteenth amendment, prohibiting involuntary servitude,
the fifteenth, protecting the right to vote, and the fourteenth, pro-
viding that " No State shall make or enforce any law which shall
abridge the privileges or immunities of citizens of the United States ;
nor shall any State deprive any person of life, liberty, or property,
without due process of law, nor deny any person within its juris-
diction the equal protection of the laws."
We are, however, informed by counsel who has examined the cases
involved that the fourteenth amendment has had no appreciable
effect in protecting personal rights. According to the existing de-
cisions, the due-process clause does not guarantee the right of trial
by jury,1 nor does it necessitate indictment by grand juries,2 nor
has it restrained arbitrary arrests and imprisonment on the part of
State governments when men are kidnaped in one State and carried
to another.3
Up to 1911 the United States Supreme Court intervened in 55 cases
in which the fourteenth amendment was invoked. In 39 of these
cases .private corporations were the principal parties. Thirty-two
statutes were affected by these decisions, and in only three, concern-
ing the civil rights of negroes, were the personal rights of individual
citizens involved. With the exceptions involving the rights of
negroes in jury cases (e. g., Strauder v. West Virginia, 100 U. S.,
303), the fourteenth amendment has not acted to secure or protect
personal rights from State encroachment,4 but only to prevent en-
croachment on property rights.5 In all the other numerous cases in
which the fourteenth amendment was invoked to protect personal
rights, the attempt failed.
On the other hand there is abundant evidence of the great protec-
tion which it affords corporations and other forms of organized
capital. On that point we may quote the statements of Mr. C. W.
Collins, of the Alabama bar, who analyzed the decisions of the United
States Supreme Court through the October, 1910, term.6
Private corporations are using it as a means to prevent the enforcement of
State laws. Since 1891 a majority of cases under the amendment have involved
a corporation as the principal party. * * * The increase of this kind of
litigation runs parallel to the rise of the trust movement in America. At the
1909-10 term of the court, out of a total of 26 opinions rendered under the
amendment 20 involved a corporation as the principal party.
* * * The fourteenth amendment is the easiest of all constitutional meas-
ures to invoke. In a country where economic activity is so intense and time
so vital an element, it has been grasped as a sure measure of delay, with always
the possibility of obtaining affirmative relief. The amendment, though in-
tended primarily as a protection to the negro race, has in these latter days be-
1 Maxwell v. Dow, 176 TL S., 581 ; Walker v. Sauvinet, 92 U. S., 90.
2 Hurtaclo v. California, 119 U. S., 516.
s He Pettibone, 12 Idaho, 264 ; 203 U. S., 192 ; Re Moyer, 35 Colo., 150 ; 140 F. R.,
870 ; 203 U. S., 221 ; Re Boyle, 6 Idaho, 609.
* See for illustration : Virginia v. Rives. 100 TJ. S., 313 ; Plessy v. Ferguson, 163 U. S.,
537 ; Twining v. New Jersey, 211 U. S., 78 ; Brown v. N6w Jersey, 175 U. S., 172.
6 See for illustration: C. M. & St. P. Ry. v. Minnesota, 134 11. S., 418; Cotting v.
K. C. Stockyards Co., 183 TJ. S., 79 ; G. C. & S. F. Ry. v. Ellis, 168 U. S., 150.
6 The Fourteenth Amendment and the States, C. W. Collins.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 49
come a constitutional guaranty to the corporations that no State action to-
ward them can become effective until after years of litigation through the
State and Federal courts to the Supreme Court of the United States. The
course of the amendment is running away from its originally intended channel
(p. 145).
The fourteenth amendment, although a humanitarian measure in origin and
purpose, has been within recent years practically appropriated by the corpora-
tions. It was aimed at restraining and checking the powers of wealth and
privilege. It was to be a charter of liberty for human rights against property
rights. The transformation has been rapid and complete. It operates to-day
to protect the rights of property to the detriment of the rights of man. It has
become the Magna Charta of accumulated and organized capital (p. 137).
It is thus quite clear that the fourteenth amendment not only nas
failed to operate to protect personal rights but has operated almost
wholly for the protection of the property rights of corporations.
These facts taken in conjunction with the many decisions, such as
the Lochner case,1 in which the fourteenth amendment has been
invoked to annul statutes designed to better conditions of life and
work, must constitute just ground for grave concern not only to the
workers but to every citizen who values his liberty.
With the "bills of rights" contained in the constitutions of the
several States, the situation, as far as the workers are concerned, is
somewhat different, since in many jurisdictions these have been used
upon numerous occasions to afford substantial protection to them in
their personal rights. The workers call attention particularly, how-
ever, to the long list of statutes, city ordinances, and military orders
abridging freedom of speech and press, which not only have not
been interfered with by the courts but whenever tested have almost
uniformly been upheld by the State and Federal courts.2 They
point also to the grave injuries done to workers individually and
collectively by the thousands of arrests which have been made with-
out just cause in labor disputes, without relief from either the courts
or the executive; to the denial of the right to the writ of habeas
corpus upon numerous occasions; to the fact that where, as for ex-
ample, in Los Angeles, San Diego, and Fresno (Cal.), Spokane
(Wash.), Minot (N. Dak.), Paterson (N. J.), Little Falls (N. Y.),
Lawrence (Mass.), Idaho, Colorado, and West Virginia, workers
have been grievously injured, brutally treated, or interfered with in
the pursuit of their guaranteed rights by other classes of citizens or
by officials, the courts have not interfered and the perpetrators have
gone unpunished.
On the general question of martial law and habeas corpus a mem-
ber of the staff has made an elaborate comparison of the cases aris-
ing- from nonlabor disturbances with the cases arising from labor
disturbances. It is not necessary, and would require too much space,
to recite these cases in full, but among the former may be mentioned
the Milligan case, and other cases arising in the State courts of Indi-
ana, Illinois, Kentucky, North Carolina, and Wisconsin 3 (all during
or immediately following the Civil War), and three cases in the
courts of Kentucky, Ohio, and Oklahoma since that time ; 4 among
1 Lochner v. N. Y., 198 U. S., 45.
2 Fox v. Washington, 236 U. S.. 273 ; Fitts v. Atlanta, 121 Ga., 267 ; Ex parte Thomas,
102 Pacific, 19.
3 In re Milligan, 4 Wall. (U. S.), 2; Skeen v. Monkeimer, 21 Ind., 1; Johnson v.
Jones, 44 111., 142 ; Corbin v. Marsh, 2 Dur., 193 ; Ex parte Moore, 64 N. C.f 802 ;
In re Kemp, 16 Wis., 382.
4 Franks v. Smith, 142 Ky., 232 ; Ohio v. Coit, 8 Ohio, 62 ; Fluke v. Canton, 31 Okla., 718.
38819°— 16 4*
50 BEPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
the latter, i. e., those arising from labor disturbances, are included
the cases from Colorado, Idaho, Montana, Pennsylvania, and West
Virginia.1 The results of such comparison are summarized in part
as follows:
Although uniformly held that the writ of habeas corpus can only be sus-
pended by the legislature, in these labor disturbances the executive has in fact
suspended or disregarded the writ. In the labor cases the judiciary either
disregards the fact that the writ has been suspended by the executive or evades
the issue. In nonlabor cases the courts have protested emphatically when the
executive attempted to interfere with the writ of habeas corpus.
In many instances in which the military has been in active operation be-
cause of nonlabor disturbances, the judiciary has almost without exception pro-
tested against the exercise of any arbitrary power and has almost uniformly
attempted to limit that power.
In cases arising from labor agitations, the judiciary has uniformly upheld
the power exercised by the military, and in no case has there been any pro-
test against the use of such power or any attempt to curtail it, except in Mon-
tana, where the conviction of a civilian by military commission was annulled.
Finally, it is impossible to imagine a more complete mockery of
justice and travesty upon every conception of fair dealing than the
innumerable decisions holding unconstitutional wise and salutary
laws for the protection of workers, upon the ground that they vio-
late the right of contract, even while the workers, whose rights are
supposed to be affected, clamor for the maintenance of the statute.
The appeal for the protection of the workers' rights in such cases
comes invariably from the employers, and is urged against the pro-
test of the workers, yet in almost unbroken succession the judges sol-
emnly nullify the wisest acts of legislatures on just such specious,
self-serving pleas. There are notable cases in which the judges have
unmasked the mummery, as, for example, in Holden v. Hardy,2 where
it was said:
Although the prosecution in this case was against the employer of labor, who,
apparently, under the statute, is the only one liable, his defense is not so much
that his right to contract has been infringed upon, but that the act works a
peculiar hardship to his employees, whose right to labor as long as they please
is alleged to be thereby violated. The argument would certainly come with
better grace and greater cogency from the latter class.
There appear to be no reported cases in which the workers have
urged that their rights are violated by such restrictive legislation,
which in fact invariably originates with them; but the courts con-
tinue to hand down decisions " protecting the sacred right of con-
tract of the worker," when the only person benefited is the employer,
who is thus able to " turn the very Constitution itself into an instru-
ment of inequality."
This entire situation is fraught with such grave dangers not only
to the workers but to all citizens who value their individual liberty,
that the Nation can not be entirely secure until those fundamental
rights are affirmatively guaranteed to every citizen of the United
States by the Federal Government. It is therefore earnestly recom-
mended that Congress forthwith initiate an amendment to the Con-
stitution securing these rights against encroachment by Federal,
State, or local governments or by private persons and corporations.
Fifth. It is charged that the ordinary legal machinery provides
no adequate means whereby laborers and other poor men can secure
1 In re Moyer, 35 Colo.. 159 ; in re Boyle, 6 Idaho, 609 ; In re McDonald. 49 Mont.,
455; Com. v. Shortall, 206 Pa., 165; Mays and Nance v. Brown, 71 W. Va., 519; Ex
parte Jones, 71 W. Va., 567.
2 169 U, S., 366.
BEPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 51
redress for wrongs inflicted upon them through the nonpayment of
wages, through overcharges at company stores, through exorbitant
hospital and other fees, fines, and deductions through fraud on the
Eart of private employment offices, loan offices, and installment
ouses, and through the " grafting " of foremen and superintendents.
The losses to wage earners from these sources are stated to amount
each year to millions of dollars and to work untold hardship on a
class of men who can ill afford to lose even a penny of their hard-
won earnings.
These charges were thoroughly investigated in all parts of the
country by an experienced member of the commission's staff.
He cites, for example, that in California, where the situation has
been more completely uncovered than elsewhere and where remedies
are beginning to be applied, during the year ending June, 1914,
9.621 claims were presented to the commissioner of labor alone. Of
these, 7,330 were for nonpayment of wages, of which 4,904 were suc-
cessfully settled and $110.912 of unpaid wages was collected. This is
believed to have been only a small proportion of the total claims of
laborers throughout the State, inasmuch as the number of claims was
growing rapidly as the work of the bureau became better known,
and because, during a period of only 10 months, over 2,200 claims
were presented to the State commission on immigration and hous-
ing. The work of handling these claims and making its existence
known to laborers throughout the State was just getting well under
way, although with a small appropriation and inadequate force,
when the collection of wage claims was suddenly checked by a de-
cision of 'the State court of appeals1 that the payment-of- wages law
was unconstitutional on the ground that since it provided for fine
or imprisonment where the wages of laborers were illegally retained,
it was in effect a provision for imprisonment for debt.
The investigation in other States revealed equally bad or worse
conditions, while in all except a few no efficient means existed by
which these claims could be prosecuted. In conclusion, our investi-
gator reported :
(a) The existing labor and life conditions of common laborers in
this country produce immense numbers of justified labor complaints
and claims, involving not only great sums of money in the aggre-
gate but untold personal hardship and suffering.
(Z>) The existing public and private legal institutions are utterly
inadequate to secure justice to the laborers in the matter of these
complaints and claims.
(c) This situation has already created in the laborers distrust of
the Government, of employers, and of the well-to-do classes gener-
ally, and is one of the contributory causes of the existing industrial
unrest.
The measures recommended, which have to do largely with State
and local administrations, are discussed on page 89. It is sug-
gested, however, that the commission recommend to Congress that,
inasmuch as the immigrant laborers, who suffer most largely from
these injustices, are ethically and legally wards of the Nation until
they become citizens, the Bureau of Immigration of the Federal
Department of Labor should be given the authority and necessary
!Nov. 23, 1914.
52 REPORT OF COMMISSION ON INDUSTRIAL EELATIONS.
appropriations to establish, wherever it may seem necessary, in con-
nection with its existing offices in all parts of the country, legal aid
divisions which would freely and aggressively prosecute these claims
and complaints on behalf of the immigrant laborers, and, if there
are no constitutional or statutory barriers, on behalf also of Ameri-
can citizens.
Sixth. It is charged by the workers that the courts, by the unwar-
ranted extension of their powers in the issuance of injunctions, have
not only grievously injured the workers individually and collectively
upon innumerable occasions but have, by the contempt procedure
consequent upon disobedience to such injunctions, deprived the work-
ers of the right, fundamental to Anglo-Saxon institutions, to be tried
by jury.
This charge is not limited to members of trades-unions, nor to work-
ers, but is voiced also by many who have no reason for partisanship.
For example, Mr. S. S. Gregory, former president of the American
Bar Association, testified before the commission :
These injunctions are based upon the theory that the man carrying on a busi-
ness has a certain sort of property right in the good will or the successful con-
duct of that business; and that when several hundred or several thousand
excited men gather around his premises where he carries his business on and
threaten everybody that comes in there to work, and possibly use violence, that
that is such an unlawful interference with property right as may be the subject
of protection in equity. And that view of the law has been sustained by the
courts of practically all the States.
But the great difficulty about this was this, that having enjoined defendants,
namely, striking workmen, perhaps from unlawful interference with the busi-
ness of the employer, where that unlawful interference consisted in an attack
or an assault and battery upon another man, to wit, perhaps a strikebreaker
so-called, or one who was hired to take the place of one of the striking work-
men, that thereafter the judge who had ordered the injunction and whose
authority had been thus defied, was permitted to put the person charged with
the breach of that injunction upon trial upon a charge of contempt, really for
having committed an unlawful and criminal act.
Now the Constitution has thrown around the prosecution of criminals (the
Constitutions, State and Federal) a number of securities. They are entitled
to trial by jury ; they are entitled to be confronted by the witnesses who are to
testify against them ; they are entitled to be heard by counsel.
But none of those guaranties except perhaps the right to be heard by counsel
is secured in contempt proceedings ; and the obvious wisdom of permitting 12
men drawn from the body of the people to pass on questions of fact — men who
are supposed to be prejudiced neither for nor against the parties, who know
nothing about the case until they are sworn in the jury box — has so far com-
mended itself to the wisdom of legislators and jurists to such a degree that it
has become a permanent feature of our jurisprudence ; and to provide that the
court may proceed against parties for contempt, where the conduct charged
against them is criminal, is really an evasion of the constitutional guaranties
and a plain attempt to commit to equity jurisdiction over matters which it has
been decided over and over again by all the courts that it has no jurisdiction
with respect to, namely, the administration of the criminal law.
For instance, I might receive, as I leave the room of this tribunal to-day, a
threatening letter from somebody saying they were going to kill me for some-
thing I had said, or had not said, before the commission. Now, that involves
personal loss possibly to my wife or those dependent upon me ; but no court of
equity would listen for a moment to a bill I should file saying "A B " or some
other blackhand gentleman had threatened to kill me, or if filed by anybody
dependent upon me, and therefore there should be an injunction to prevent him
from killing me. That would be an absurdity — a legal absurdity ; and none the
less is it so where a man is enjoined from committing acts of violence in a
strike to try him for contempt, without a trial by jury. And that has been an
injustice that has rankled in the minds of everybody that has been a victim
of it, and justly so.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 53
Sir Charles Napier says, "People talk about agitators, but the only real
agitator is injustice ; and the only way is to correct the injustice and allay the
agitation."
Judge Walter Clark, chief justice of the Supreme Court of North
Carolina, also testified before the commission as follows:
Chairman WALSH. Have you studied the effect of the use of injunctions in
labor disputes generally in the United States, as a student of economics and
the law?
Judge CLAKK. I do not think they can be justified, sir, * * * [Their
effect] has been, of course, to irritate the men, because they feel that in an
Anglo-Saxon community every man has a right to a trial by jury, and that to
take him up and compel him to be tried by a judge is not in accordance with
the principles of equality, liberty, and justice.
Chairman WALSH. Do you think that has been one of the causes of social
unrest in the United States?
Judge CLAKK. Yes, sir ; and undoubtedly will be more so, unless it is remedied.
It is not within the province of the commission to attempt to decide
the question of whether or not the issuance of such injunctions is an
unwarranted extension upon the part of the courts ; but the weighty
opinions cited above are very impressive and are convincing that the
workers have great reason for their attitude. It is known, however,
from the evidence of witnesses and from the information collected by
the staff, that such injunctions have in many cases inflicted grievous
injury upon workmen engaged in disputes with their employers, and
that their interests have been seriously prejudiced by the denial of
jury trial, which every criminal is afforded, and by trial before the
judge against whom the contempt was alleged.
It is felt to be a duty, therefore, to register a solemn protest against
this condition, being convinced of its injustice not only by reason of
the evil effects which have resulted from this procedure, but by
virtue of a conviction that no person's liberty can safely be decided
by any one man, particularly when that man is the object of the
alleged contempt.
The Clayton Act undoubtedly contains many features which will
relieve this situation as far as the Federal courts are concerned, but
it seems clear that it does not contain anything like a complete solu-
tion of the existing injustices, even for the limited field of Federal
jurisdiction.
Seventh, it is charged by the representatives of labor that laws de-
signed for the protection of labor in workshops and mines and on
railroads are not effectively enforced, except in a few States. This
is a matter of considerable moment to labor, but it is, after all, re-
garded by the workers, since it concerns chiefly only their safety and
comfort, as ranking far below the other matters discussed, which in-
volve primarily their liberty and rights as freemen and, secondarily,
their only means of bettering their condition. Moreover, it is almost
entirely a matter of administration, which is discussed in detail else-
where in the report. With the great attention which the method of
administration is now receiving, not only from labor organizations
but from civic organizations, and lately even from employers' asso-
ciations, it is likely to reach a satisfactory stage before very long.
Eighth, it is charged that in cases involving industrial questions,
the workers are liable to great injustice by reason of the fact that in
many localities they are excluded from juries either by the qualifica-
tions prescribed (usually payment of property tax) or by the method
of selection.
54 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
In California, for example, it was testified that grave injustice
had heen done in many cases because the juries (composed only of
property owners, for the most part employers) were greatly prej-
udiced against the defendants, whose program, if successful, would
directly or indirectly affect the interests of the jurors.
Similarly, in Cook County, 111., which includes Chicago, it was
found by a committee of the Lawyers' Association of Illinois that
although the system of selection by commissioners was intended to
produce an impartial selection from all classes of the community,
out of probably 1,000 different occupations in Cook County the
commissioners confine the selection of the great bulk of the jurors
to the following 10 occupations: Managers, superintendents, fore-
men, presidents and owners of companies, secretaries of companies,
merchants, agents, salesmen, clerks, and bookkeepers.
To quote from the report :
There are 76,000 mechanics affiliated with the Building Trades Council in
Chicago, yet in the 3,440 jurors investigated by your committee there are only
200 mechanics drawn from the 76,000 in the Building Trades Council.
There are about 200,000 mechanics belonging to the different labor organiza-
tions in Chicago, yet there are only about 350 mechanics drawn as jurors by
the commissions in the 3,440 investigated, or about 10 per cent, when the per-
centage ought to be about 70 per cent.
The report of the committee adds:
Another comparison will show that out of these 3,440 jurors the commission
took only 314 jurors from 130 different occupations, or an average of less than 3
jurors from each occupation, while from the 10 favored occupations mentioned
above, 1,723 jurors were picked, or the grossly excessive average of 172 from
each of said 10 occupations.1
A similar situation was disclosed by the investigations of members
of the staff in Paterson, N. J.
Finally, there is the very grave situation where, by putting aside
the legal and customary methods, the jury is chosen by the sheriff
or other officers, who may be unduly influenced by either party to
the case. Such a situation, inimical in the extreme to the interests
of the workers, has been conclusively proved to have existed in Colo-
rado and in other mining districts.
In the belief that the right to trial by an impartial jury is neces-
sary for the maintenance of justice, and that such impartiality can
be secured only by including all classes of citizens, it is suggested
that the commission recommend that Federal and States statutes
should be passed providing for the creation of juries by drawing
the names from a wheel, or other like device, which shall contain the
name of every qualified voter in the district from which the jury is
to be selected. The adoption of this method in Missouri and other
States has resulted uniformly in securing impartial juries of much
higher grade, and has also eliminated almost entirely the sources of
corruption attending the selection of juries.
Ninth, it is charged by the workers that, during strikes, innocent
men are in many cases arrested without just cause, charged with
fictitious crimes, held under excessive bail, and treated frequently
with unexampled brutality for the purpose of injuring the strikers
and breaking the strike.
In support of this charge, the commission has been furnished with
evidence showing that in a number of recent strikes large numbers
1 Eternal Vigilance is the Price of Liberty. Report of committee to the Lawyers'
Association of Illinois, 1914.
KEPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 55
of strikers were arrested, but that only a small number were brought
to trial and relatively few were convicted of any serious offense;
that those arrested were, as a rule, required to give heavy bail, far
beyond their means, or were detained without trial until their effec-
tiveness as strikers was destroyed; and that in many cases strikers
were brutally treated by the police or by special deputies in the pay
of the companies. A number of these strikes have been investigated
by public hearings of the commission, by members of its staff, or by
other departments of the Federal Government. In each of the strikes
investigated the charges as made were in essentials substantiated.
In Paterson, N". J., which was investigated with unusual thorough-
ness and which, because of its size and its location in the most
densely populated section, might be considered likely to be free from
such abuses, it was found that during the strike of the silk workers
2,238 arrests, charging unlawful assembly or disorderly conduct,
were made, and that in all there were 300 convictions in the lower
courts. Men arrested for unlawful assembly were held in bail of
$500 to $5,000. The right of trial by jury was generally denied.
Men were arrested for ridiculous reasons, as, for example, for stand-
ing on the opposite side of the street and beckoning to men in the
mills to come out. This was the allegation on which the charge of
unlawful assembly was placed against four men, and for which they
were sent to jail in default of $500 bail, and, although never indicted,
the charges still stand against them as a bar to their rights as citizens
and voters. Men were fined arbitrarily, as in the case of one who
was fined $10 for permitting strikers to sit on a bench in front of his
house. Not more than $25 worth of damage was done during the
entire strike, involving 25,000 workers, and there was no actual
violence or attempt at violence on the part of the strikers during the
entire strike. Under such conditions the editor of a local paper was
arrested, charged with criminal libel, for comparing the conditions
in Paterson with the rule of Cossacks; and four men who sold the
paper on the streets also were arrested. The editor was tried and
convicted in the lower court, but the verdict was set aside by the
Supreme Court, while the four men, after being held several days
in default of bail, were released without trial.
It is impossible to summarize the activities of the police and au-
thorities during this strike better than by referring to the testimony
of two of the leading citizens of Paterson, who said that they had
resolved to get rid of the " agitators " and were ready to go beyond
the law to accomplish their purpose.1 A full appreciation of the
1 In a letter recently received from one of these witnesses his position is reiterated
with a striking illustration of inability to comprehend the fundamental principles of
American Government and the limitations imposed upon the power of one class to
oppress another :
" Another point which is only partially covered in my testimony is in regard to what
Chairman Walsh endeavored to get me and various other citizens to admit would be an
infraction of free speech and personal liberty if the agitators were prevented from coming
into Paterson or not permitted to hold their meetings here. The United States Govern-
ment puts up the bars at Ellis Island against certain classes of ' undesirable citizens,'
and as far as I have been able to learn the Government's action in debarring from this
country the immoral and criminal class and those who would become a charge on the
country meets with the approval of the Americans generally. If it is proper and right for
the United States Government to say who shall and who shall not enter this country I
think it is equally proper for the city of Paterson to debar undesirable citizens who are
coming here to sow discontent and cause trouble in the city. New York City has had a
dead line at Fulton Street for a great many years and the police authorities have pre-
vented certain persons from crossing that line, and this has been considered a proper
exercise of the police powers of the city. I can see no difference between this action on
the part of the New York authorities and similar action which was desired by many of
our citizens in Paterson in regard to the I. W. W. agitators."
56 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
injustice committed during this strike can be secured only by read-
ing the testimony taken at Paterson and the reports of the com-
mission's investigators based upon the records of the police and the
courts.
In Los Angeles and Indianapolis essentially the same conditions
were found by the commission, while in McKees Rocks, Bethlehem,
and Westmoreland County, Pa., Lawrence, Mass., and Calumet,
Mich., investigated by the Federal Department of Labor, essentially
the same conditions of injustice were found to prevail. The condi-
tions in West Virginia and Colorado, which were almost beyond
belief and had the additional feature of military rule, will be dis-
cussed elsewhere. >
An examination of the entire mass of evidence is convincing that
such conditions are in fact typical of strikes which are serious enough
to arouse the authorities, especially where the workers are unor-
ganized before the strike and therefore lacking in influence in the
community.
Tenth, it is asserted by the workers that in many localities during
strikes not only is one of the greatest functions of the State, that of
policing, virtually turned over to employers or arrogantly assumed
by them, but criminals employed by detective agencies and strike-
breaking agencies are clothed, by the process of deputization, with
arbitrary power and relieved of criminal liability for their acts.
Only three such cases are cited here, though the commission has in
its records evidence regarding a considerable number. At Roosevelt,
N. J., it was found by the commission's investigators and later con-
firmed in court that the office of sheriff was virtually turned over to
one Jerry O'Brien, the proprietor of a so-called detective agency;
that he imported a number of men of bad reputation and clothed
them with the authority of deputies; and that on January 19, 1915,
these criminals, without provocation, wantonly shot and killed 2
men and wounded 17 others who were on strike against the American
Agricultural Chemical Co., which paid and armed the deputies.
Similarly, during the Calumet, Mich., strike, about 230 men were
imported from detective agencies in eastern cities, 52 under pay from
the county board of supervisors, which was made up almost entirely of
copper company officials. The actions of these men were so wantonly
brutal that they were censured by the local judge, but they went
unchecked in their career of arrogant brutality, which culminated in
their shooting, without provocation, into a house in which women
and children were, killing two persons and wounding two others.
The recent strike in Bayonne, N. J., threw more light on these
armed guards. During this strike one of the New York detective
agencies furnished for the protection of the Tidewater Oil Co.'s
plant men who were so vicious and unreliable that the officials of
the company themselves say that their presence was sufficient to incite
a riot. These men shot without provocation at anyone or everyone
who came within sight, and the killing of at least three strikers in
Bayonne and the wounding of many more is directly chargeable to
these guards.
The character of the men who make a specialty of this kind of
employment has never been more frankly described than in the testi-
mony of Mr. L. M. Bowers, chairman of the board of directors of
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 57
the Colorado Fuel & Iron Co., who repeatedly referred to those in
the employ of that company as " cutthroats," against whose charac-
ter, he stated, he had frequently protested.
According to the statement of Berghoff Bros. & Waddell, who
style themselves "labor adjusters" and who do a business of strike
breaking and strike policing, there are countless men who follow this
business at all times. They say they can put 10,000 armed men into
the field inside of 72 hours. The fact that these men may have a
criminal record is no deterrent to their being employed, and no check
can be made on the men sent out by these companies on hurry calls.
When the question of providing the bail for these men arose as a
result of the killing of the strikers at Bayonne, the company attor-
ney actually declined to furnish bail for them on the ground that
they were thugs of whom the company knew nothing and that it
would not be responsible for their appearance.
In view of the endless crimes x committed by the employees of the
so-called detective agencies, who have been permitted to usurp a func-
tion that should belong only to the State, it is suggested that the com-
mission recommend to Congress either that such of these agencies as
may operate in more than one State, or may be employed by cor-
porations engaged in interstate commerce, or may use the mails, shall
be compelled to take out a Federal license, with regulations to insure
the character of their employees and the limitation of their activities
to the bona fide business of detecting crime, or that such agencies
shall be utterly abolished through the operation of the taxing power
or through denying them the use of the mails.
Eleventh. It is charged that in many localities the entire system
of civil government is suspended during strikes and there is set up
in its place a military despotism under so-called martial law.
In West Virginia, for example, during the strike of coal miners
in 1912 martial law was declared and the writ of habeas corpus
denied, in the face of a direct prohibition by the constitution of the
State, in spite of the fact that the courts were open and unobstructed,
and without reference to the protests of the strikers. Persons out-
side the military zone were arrested, dragged before military courts,
tried and sentenced under so-called martial law. Upon appeal to
the civil courts of the State the actions of the military authorities
were upheld, in spite of the oath of the judges to support the consti-
tution, which in terms provided " that no citizen, unless engaged in
the military service of the State, shall be tried or punished by any
military court for any offense that is cognizable by the civil courts
of the State," and, further, " The privilege of the writ of habeas
corpus shall not be suspended."
The decisions of the court stirred Hon. Edgar M. Cullen, a former
chief judge of the Court of Appeals of New York — a witness before
this commission and recognized as unusually conservative and care-
ful in his utterances — to make the following statements:
Tinder these decisions the life and liberty of every man within the State
would seem to be at the mercy of the governor. He may declare a state of war,
whether the facts justify such a declaration or not, and that declaration is con-
clusive upon the courts.
1 See the reports of congressional committees which investigated the Homestead strike,
the Pullman strike, and the recent strikes in Colorado and West Virginia.
58 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
If he declares only a portion of the State to be in a state of war, under the
decision in the second case a person in any other part of the State, however
distant, may be arrested and delivered to the military authorities in the
martial zone, and his fate, whether liberty or life, depends on the action of a
military commission, for I know of no principle which authorizes a military
commission to impose the punishment of imprisonment that would not equally
authorize the imposition of the punishment of death. Under that doctrine,
should armed resistance to the Federal authority justifying a suspension of
the writ of habeas corpus occur in Arizona a citizen could, on a charge of
aiding the insurrection, be dragged from his home in Maine and delivered to
the military authorities in Arizona for trial and punishment.
The remedy suggested by the learned court, of impeachment by the legisla-
ture, would hardly seem of much efficacy. By impeachment the governor
could only be removed from office. He could not be further punished, however
flagrant his opposition may have been, except by a perversion of the criminal
law, for if the doctrine of the courts is correct he would not have exceeded his
legal power.
The governor might imprison or execute the members of the legislature, or
even the learned judges of the supreme court themselves.1
The attention of the commission has also been directed by wit-
nesses to the repeated occurrence of similar or, if possible, more ex-
treme conditions in Colorado and Idaho, which testimony has been
confirmed either by the investigations and hearings of the commis-
sion or by the reports of responsible officials of the Federal Govern-
ment. In Colorado martial law has been in effect ten times since
1894. Similarly in Idaho martial law has been in effect on several
occasions. In both of these States not only have strikers been impris-
oned by military courts, but thousands have been held for long
periods in u bull pens," hundreds have been forcibly deported from
the State, and so arrogant have the troops become upon occasions
that they have refused to obey the mandates of the civil courts,
although the constitutions of both States provide that the military
shall always be in strict subordination to the civil power.2 In fact,
on one occasion at least^ when orders of the court for the production
of prisoners had been ignored and the military officers were sum-
moned before the court, they surrounded the courthouse with in-
fantry and cavalry, came into court accompanied by soldiers with
fixed "bayonets, and stationed a gatling gun in a position command-
ing the courthouse.2 During the recent strike in Colorado the mili-
tary was supreme and wielded its arbitrary power despotically and at
times brutally.
i . Twelfth, it is charged by the workers that in some localities the
control by the employers of the entire machinery of government is
so great that lawless acts on the part of agents of the employers go
imheeded and unpunished, while vindictive action against the
leaders of the strike is accomplished by methods unparalleled in
civilized countries. It is seldom that evidence sufficient to substan-
tiate such sweeping charges can be secured, even if the charges are
true; but in the testimony and documents which have been gathered
by the commission there seems to be conclusive proof that in one
State at least, Colorado, such a condition of complete domination of
the State government has prevailed and, it would seem, does still
prevail.
1 Address before New York State Bar Association, 1014.
* Constitution of Colorado I, .">::. Constitution of Idaho I, 12.
8 See report of U.'S. Commissioner of Labor, Carroll 1). \Vright, on Labor Disturbances
in Colorado for a detailed history of events up to and including 1904.
KEPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 59
First, Hon. Frederick Farrar, attorney general of Colorado, tes-
tified in substance as follows:
As a result of a personal investigation into conditions in Las Animas and
Huerfano Counties, Colo., in the summer of 1913, a very perfect political
machine was found to exist. The head of this political machine is the sheriff,
and it is conducted along lines very similar to those maintained by corrupt
political organizations. It has a system of relief in case of need, and a system
of giving rewards to its people. It was difficult to determine which was cause
and which effect, but there was undoubtedly some relationship between the
political machine and the coal companies. Witness believes the machine ex-
isted through its power as a machine over the coal companies, but has no
knowledge of any money being used. His investigation did not lead into
question of whether the machine controlled coroners' juries in cases of death
from accidents in mines, etc., or of whether mining laws were obeyed.
Second, Hon. Thomas M. Patterson, formerly United States Sen-
ator, testified :
The men employed by the large mining companies have been used to gain
political power. There is no doubt that it is the deliberate purpose of these
companies to control the officials of the counties in which they are operating,
and to have a great influence in the selection of judges and in the constitution
of the courts. In this purpose they have been successful. Election returns
from the two or three counties in which the large companies operate show
that in the precincts in which the mining camps are located the returns are
nearly unanimous in favor of the men or measures approved by the companies,
regardless of party. The companies know whom they want elected, and do not
hesitate, judging from the results, to make it known.
Third, State Senator Helen Ring Robinson testified in substance
as follows;
As a member of the committee of privileges and elections, which investi-
gated conditions in Las Animas County, she listened for three weeks to the
story of political conditions there. Long before the strike was ordered she
realized that the industrial situation was hopeless because the political situ-
ation appeared hopeless.
" I found that while the counties of Las Animas and Huerfano are geographi-
cally a part of Colorado, yet industrially and politically they are a barony or a
principality of the Colorado Fuel & Iron Co. Such situations, of course, must
mean a knitting together of the industrial and political situation, and I don't
wish to say that the Colorado Fuel & Iron Co. have limited their efforts to Las
Animas and Huerfano Counties. If that were so, the situation in the State
itself would not be so seriously affected by them; but they have in time past
reached out beyond the boundaries of their principality and made and unmade
governors; men who desire positions of high place in Colorado would be very
loath to antagonize them whether they lived in Las Animas or Routt County, or
in Denver, and it would not matter in that case to which political party they
belonged."
Attention should be called to another aspect of the control of the
machinery of government by one class for the oppression of another.
The scales of justice have in the past swung far in one direction-
legislatures, courts, and administrative officers under the domination
of corporations have grievously wronged the workers. There is
grave danger that, if the workers assert their collective power and
secure the control of government by the massing of their numbers,
the scales may swing equally far in the other direction and every act
of injustice, every drop of blood, every moment of anguish, be repaid
in full, not upon some obscure and humble worker, but upon those
who now glory in the sense of boundless power and security.
In the few cases in which the workers have momentarily secured
control of local situations, they have followed the examples that
60 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
have been set and have in many instances used their power unjustly
and oppressively. In Colorado, for example, during the strikes in
the metal mines, where the Western Federation of Miners controlled
a camp, they followed the example of the operators and deported
persons whom they deemed to be obnoxious. Similarly, during the
fight between two factions of the Western Federation of Miners in
Butte, Mont., the dominant faction forced several persons to leave,
the city and set aside the ordinary processes of law. It is inevitable
that this should be the case, and it is remarkable only that the masses
of workers, even when acting as mobs, show greater self-restraint
than do organizations made up of business men ordinarily regarded
as upright, respectable, and admirable citizens.
For the security and honor of the Nation the scales of justice
must be brought to a stable equilibrium. This can be accomplished
only by a realization by every citizen that every act of injustice,
whether done in far-off States or at one's very door, whether affect-
ing a friend or an enemy, is in its consequences an invasion of one's
own security and a menace to one's liberty.
There is reason, however, to expect that no sober and well-consid-
ered action for the removal of these abuses will be taken, and one
may, without being an alarmist, share the fears expressed by Judge
Seymour D. Thompson :x
The dangerous tendencies and extravagant pretensions of the courts which
I have pointed out ought not to be minimized, but ought to be resisted. Their
resistance ought not to take place as advised by Jefferson, by " meeting the
invaders foot to foot," but it ought to take place under the wise and moderate
guidance of the legal profession, but the danger is that the people do not
always so act. In popular governments evils are often borne with stolid
patience until a culminating point is reached, when the people burst into sudden
frenzy and redress their grievances by violent and extreme measures, and even
tear down the fabric of government itself. There is danger, real danger, that
the people will see at one sweeping glance that all the powers of their Govern-
ment, Federal and State, lie at the feet of us lawyers, that is to say, at the feet
of a judicial oligarchy ; that those powers are being steadily exercised in behalf
of the wealthy and powerful classes, and to the prejudice of the scattered and
segregated people; that the power thus seized includes the power of amend-
ing the Constitution; the power of superintending the action, not merely of
Congress, but also of the State legislatures ; the power of degrading the powers
of the two Houses of Congress, in making those investigations which they may
deem accessory to wise legislation, to the powers which an English court has
ascribed to British colonial legislatures; * * holding that a venal legis-
lature, temporarily vested with power, may corruptly bargain away those
essential attributes of sovereignty and for all time; that corporate franchises
bought from corrupt legislatures are sanctified and placed forever beyond
recall by the people ; that great trusts and combinations may place their yokes
upon the necks of the people of the United States, who must groan forever
under the weight, without remedy and without hope ; that trial by jury and the
ordinary criminal justice of the States, which ought to be kept near the people,
are to be set aside, and Federal court injunctions substituted therefor; that
those injunctions extend to preventing laboring men quitting their employ-
ment, although they are liable to be discharged by their employers at any time,
thus creating and perpetuating a state of slavery. There is danger that the
people will see these things all at once; see their enrobed judges doing their
thinking on the side of the rich and powerful; see them look with solemn
cynicism iipon the sufferings of the masses, nor heed the earthquake when it
begins to rock beneath their feet ; see them present a spectacle not unlike that
of Nero fiddling while Rome burns. There is danger that the people will see
all this at one sudden glance, and that the furies will then break loose and that
all hell will ride on their wings.
1 Address before State Bar Association of Texas, 1896.
EEPOET OF COMMISSION" ON" INDUSTEIAL KELATIONS. 61
It is true that Judge Thompson spoke 19 years ago, but the real
clanger lies in the fact that during that period we have done little to
remove the evils cited by him, and that there is even reason to fear
that we have simply moved nearer to the danger line instead of away
from it.
In considering the action which needs to be taken it has been urged
by some that the end to be achieved is to place personal rights on a
parity w^ith property rights. It is necessary to render a firm protest
and warning against the acceptance of such an ideal. The establish-
ment of property rights and personal rights on the same level can
leave only a constant and ever-growing menace to our popular insti-
tutions. With the acceptance of such an ideal our democracy is
doomed to ultimate destruction. Personal rights must be recognized
as supreme and of unalterable ascendency over property rights.
Relief from these grave evils can not be secured by petty reforms.
The action must be drastic and directed at the roots from which these
evils spring.
With full recognition of the gravity of the suggestions, it seems
necessary to urge the commission to make the following recom-
mendations :
1. That Congress forthwith initiate an amendment to the Consti-
tution providing in specific terms for the protection of the personal
rights of every person in the United States from encroachment by
the Federal and State Governments and by private individuals, asso-
ciations, and corporations. The principal rights which should be
thus specifically protected by the' power of the Federal Government
are the privilege of the writ of habeas corpus, the right to jury trial,
to free speech, to peaceful assemblage, to keep and bear arms, to be
free from unreasonable searches and seizures, to speedy public trial,
and to freedom from excessive bail and from cruel and unusual pun-
ishments.
2. That Congress immediately enact a statute or, if deemed neces-
sary, initiate a constitutional amendment, specifically prohibiting the
courts from declaring legislative acts unconstitutional.
3. That Congress enact that in all Federal cases where the trial is
by jury, all qualified voters in the district shall be included in the
list from which jurors are selected, and that they shall be drawn by
the use of a wheel or other device designed to promote absolute im-
partiality.
4. That Congress drastically regulate or prohibit private detective
agencies doing business in more than one State, employed by a com-
pany doing an interstate business, or using the mails in connection
with their business. Such regulation, if it is feasible, should include
particularly the limitation of their activities to the bona fide func-
tions of detecting crime, and adequate provision should be made for
the rigid supervision of their organization and personnel.
4. DENIAL, OF THE RIGHT OF ORGANIZATION.
The previous discussion of the'causes of industrial unrest has dealt
with the denial of certain fundamentals to which the workers believe
they have natural and inalienable rights, namely, a fair distribution
of the products of industry, the opportunity to earn a living, free
access to unused land and natural resources, and just treatment by
62 EEPOET OF COMMISSION OX INDUSTRIAL KELATIONS.
legislators, courts, and executive officials. A more serious and funda-
mental charge is, however, contained in the allegation by the workers
that in spite of the nominal legal right which has been established by
a century-long struggle, almost insurmountable obstacles are placed
in the way of their using the only means by which economic and
political justice can be secured, namely, combineo^ action through vol-
untary organization. The workers insist that this right of organiza-
tion is fundamental and necessary for their freedom, and that it is
inherent in the general rights guaranteed every citizen of a democ-
racy. They insist that " people can free themselves from oppression
only by organized force. No people could gain or maintain their
rights or liberties acting singly, and any class of citizens in the State
subject to unjust burdens or oppression can gain relief only by
combined action."
The demand for organization and collective action has been mis-
understood, it is claimed, because of the belief among a large number
of citizens that its purpose was simply to secure better wages and
better physical conditions. It has been urged., however, by a large
number of witnesses before the commission that this is a complete
misconception of the purposes for which workers desire to form
organizations. It has been pointed out with great force and logic
that the struggle of labor for organization is not merely an attempt
to secure an increased measure of the material comforts of life, but is
a part of the age-long struggle for liberty; that this struggle is
sharpened by the pinch of hunger and the exhaustion of body and
mind by long hours and improper working conditions ; but that even
if men were well fed they would still struggle to be free. It is not
denied that the exceptional individual can secure an economic suffi-
ciency either by the sale of his unusual ability or talent or by syco-
phantic subservience to some person in authority, but it is insisted
that no individual can achieve freedom by his own efforts. Simi-
larly, while it is admitted that in some cases exceptional employers
treat their employees with the greatest justice and liberality, it is
held to be a social axiom that no group of workers can become free
except by combined action, nor can the mass hope to achieve any
material advance in their condition except by collective effort.
Furthermore, it is urged by the representatives of labor that the
efforts of individuals who are bent upon bettering their own condi-
tion without reference to their health or to the interests of others
directly injure each of their fellow workers and indirectly weaken the
whole fabric of society.
It is also pointed out that the evolution of modern industry has
greatly increased the necessity for organization on the part of wage
earners. While it is not admitted that the employer who has only
one employee is on an economic equality with the person who is
employed by him, because of the fact that the employer controls the
means of livelihood, which gives him an almost incalculable advan-
tage in an}' bargain, nevertheless this condition of inequality is held
to have been enormously increased by the development of corpora-
tions controlling the livelihood of hundreds of thousands of em-
ployees and by the growth of employers' associations whose members
act as a unit in questions affecting their relations with employees.
There have been many able and convincing expositions of this
belief by witnesses before the commission, but there is no other which
BEPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 63
seems to have so completely covered the entire field as the testimony
of Mr. Louis D. Brandeis, who, as he stated, has studied this problem
from the standpoint both of employers and of employees :
My observation leads me to believe that while there are many single things —
single causes — contributing causes to unrest, that there is one cause which is
fundamental, and it is the necessary conflict between — the contrast between —
our political liberty and the industrial absolutism.
We are as free politically, perhaps, as it is possible for us to be. Every man
has his voice and his vote, and the law has endeavored to enable, and has suc-
ceeded practically in enabling, him to exercise his political franchise without
fear. He, therefore, has his part, and he certainly can secure an adequate part
of the government of the country in all of its political relations — in all rela-
tions which are determined by legislation or governmental administration.
On the other hand, in dealing with industrial problems the position of the
ordinary worker is exactly the reverse. And the main objection, as I see it, to
the large corporation is that it makes possible— and in many cases makes in-
evitable— the exercise of industrial absolutism. It is not merely the case of
the individual worker against employer, which, even if he is a reasonably
sized employer, presents a serious situation calling for the interposition of
a union to protect the individual. But we have the situation of an employer
so potent, so \vell organized, with such concentrated forces and with such ex-
traordinary powers of reserve and the ability to endure against strikes and
other efforts of a union, that the relatively loosely organized masses of even
strong unions are unable to cope with the situation.
We are dealing here with a question not of motive, but of condition. Now,
the large corporations and the managers of the large corporations — of the
powerful corporations — are probably, in a large part, actuated by motives just
the same as an employer of one-tenth of their size. Neither of them, as a
rule, wishes to have his liberty abridged ; but the smaller concern usually comes
to the conclusion that it is necessary that it should be where there is an im-
portant union found. But when you have created a great power, when there
exist these powerful organizations who can afford — not only can successfully
summon forces from all parts of the country — to use tremendous amounts of
money in any conflict to carry out what they deem to be their business prin-
ciples, you have necessarily a condition of inequality between the two con-
tending forces. The result is that contests, doubtless undertaken with the best
of motives and with strong convictions of what is for the best interests not
only of the company but of the community, leads to absolutism. In all cases
of these large corporations the result has been to develop a benevolent abso-
lutism— an absolutism all the same ; and it is that which makes the great corpo-
ration so dangerous. It is because you have created within the State a state
so powerful that the ordinary forces existing are insufficient to meet it.
Now, to my mind the situation of the worker that is involved — and I noted,
Mr. Chairman, that when you put the question you put the question of physical
condition — unrest, in my mind, never can be removed, and, fortunately never
can be removed by the mere improvement of the physical and material con-
ditions of the working man. If it were we should run great risk of improving
their material conditions and reducing their manhood. We must bear in mind
all the time that however much we may desire material improvement and
must desire it for the comfort of the individual, we are a democracy ; and that
we must have above all things men ; and it is the development of manhood to
which any industrial and social system must be directed. We are committed
not only to social justice in the sense of avoiding things which bring suffering
and harm and unequal distribution of wealth, but we are committed primarily
to democracy, and the social justice to which we are headed is an incident of
our democracy, not an end itself. It is the result of democracy, but de-
mocracy we must have. And, therefore, the end to which we must move is a
recognition of industrial democracy as the end to which we are to work, and
that means this: It means that the problems are not any longer, or to be
any longer, the problems of the employer. The problems of his business — it is
not the employer's business. The union can not shift upon the employer the
responsibility for the conditions, nor can the employer insist upon solving,
according to his will, the conditions which shall exist ; but the problems which
exist are the problems of the trade ; they are the problems of the employer and
the employee. No possible degree of profit sharing, however liberal, can meet
64 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
the situation. That would be again merely dividing the proceeds of business.
That might do harm or it might do good, dependent on how it is applied.
No mere liberality in the division of the proceeds of industry can meet this
situation. There must be a division not only of the profits, but a division of
the responsibilities; and the men must have the opportunity of deciding, in
part, what shall be their condition and how the business shall be run. They
also, as a part of that responsibility, must learn that they must bear the results,
the fatal results, of grave mistakes, just as the employer. But the right to
assist in producing the results, the right, if need be, the privilege of making
mistakes, is a privilege which can not be denied to labor, just as we must insist
on their sharing the responsibilities for the result of the business.
Now, to a certain extent we get that result — are gradually getting it — in
smaller businesses. The grave objection to the large business is that almost
inevitably, from its organization, through its absentee stockholdership, through
its remote directorship, through the creation practically of stewards to take
charge of the details of the operation of the business and coming into direct
relation with labor, we lose that necessary cooperation which our own aspira-
tions— American aspirations — of democracy demand. And it is in that, in my
opinion, that we will find the very foundation of the unrest; and no matter
what is done with the superstructure, no matter how it may be improved one
way or the other, unless we reach that fundamental difficulty, the unrest will
not only continue, but in my opinion will grow worse.
It is very significant that out of 230 representatives of the interests
of employers, chosen largely on the recommendations of their own
organizations, less than half a dozen have denied the propriety of
collective action on the part of employees. A considerable number
of these witnesses have, however, testified that they denied in prac-
tice what they admitted to be right in theory. A majority of such
witnesses were employers who in the operation of their business
maintained what they, in accordance with common terminology,
called the " open shop." The theory of the " open shop," according
to these witnesses, is that workers are employed without any refer-
ence to their membership or nonmembership in trade unions; while,
as a matter of fact, it was found upon investigation that these em-
ployers did not, as a rule, willingly or knowingly employ union
men. Nevertheless, this is deemed by the commission to be a minor
point. The " open shop," even if union men are not discriminated
against, is as much a denial of the right of collective action as is the
" anti union shop." In neither is the collective action of employees
permitted for the purpose of negotiating with reference to labor con-
ditions. Both in theory and in practice, in the absence of legisla-
tive regulation, the working conditions are fixed by the employer.
It is evident, therefore, that there can be at best only a benevolent
despotism where collective action on the part of the employees does
not exist.
A great deal of testimony has been introduced to show that em-
ployers who refuse to deal collectively with their workmen do in fact
grant audiences at which the grievances of their workmen may be
presented. One is repelled rather than impressed by the insistence
with which this idea has been presented. Every tyrant in history
has on stated days granted audiences to which his faithful subjects
might bring their complaints against his officers and agents. At
these audiences, in theory at least, even the poorest widow might be
heard by her sovereign in her search for justice. That justice was
never secured under such conditions, except at the whim of the
tyrant, is sure. It is equally sure that in industry justice can never
be attained by such a method.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 65
The last point which needs to be considered in this connection is
the attitude frequently assumed by employers that they are per-
fectly willing to deal with their own employees collectively, but will
resist to the end dealing with any national organization, and resent
the intrusion of any persons acting for their employees who are not
members of their own labor force. In practice these statements have
been generally found to be specious. Such employers as a rule op-
pose any effective form of organization among their own employees
as bitterly as they fight the national unions. The underlying motive
of such statements seems to be that as long as organizations are un-
supported from outside they are ineffective and capable of being
crushed with ease and impunity by discharging the ringleaders.
Similarly, the opposition to the representation of their employees
by persons outside their labor force seems to arise wholly from the
knowledge that as long as the workers' representatives are on the
pay roll they can be controlled, or, if they prove intractable they
can be effectually disposed of by summary dismissal.
To suggest that labor unions can be effective if organized on less
than a national scale seems to ignore entirely the facts and trend
of present-day American business. There is no line of organized in-
dustry in which individual establishments can act independently.
Ignoring for the time the centralization of control and ownership,
and also the almost universal existence of employers' associations,
the mere fact of competition would render totally ineffective any or-
ganization of employees which was limited to a single establishment.
Advance in labor conditions must proceed with a fair degree of uni-
formity throughout any line of industry. This does not indeed re-
quire that all employees in an industry must belong to a national
organization, for experience has shown that wherever even a con-
siderable part are union members, the advances which they secure
are almost invariably granted by competitors, even if they do not
employ union men, in order to prevent their own employees from
organizing.
The conclusions upon this question, however, are not based upon
theory, but upon a thorough investigation of typical situations in
which the contrast between organization and the denial of the right
of organization could best be studied. The commission has held
public hearings and has made thorough investigations in such in-
dustrial communities as Paterson, N. J., Los Angeles, Cal., Lead,
S. Dak., and Colorado, where the right of collective action on the
part of employees is denied. These investigations have shown that
under the best possible conditions, and granting the most excellent
motives on the part of employers, freedom does not exist either
politically, industrially, or socially, and that the fiber of manhood
will inevitably be destroyed by the continuance of the existing situ-
ation. Investigations have proved that although the physical and
material conditions may be unusually good, as, for example, in
Lead, S. Dak., they are the price paid for the absolute submission
I of the employees to the will of the employing corporation. Such
conditions are, moreover, shown by the hearings of the commission
and by the investigations of its staff to be unusual. Los Angeles,
for example, although exceptionally endowed in location, climate,
and natural resources, was sharply criticized for the labor conditions
38819°— 16 5*
66 HEPOET OF COMMISSION ON INDUSTRIAL RELATIONS.
which had developed during its " open shop " regime even by Mr.
Walter Drew, representing several of the largest associations which
contend for the "open shop." It is significant that the only claim
ordinarily made for the conditions in such establishments or locali-
ties is that " they are as good as are secured by the union." As a
matter of fact, there are few establishments which make this boast,
and in the majority the conditions were found to be far below any
acceptable standards.
The commission has also, through public hearings and the inves-
tigations of its staff, made a thorough and searching investigation of
the conditions in those industries and establishments where collective
action, through the medium of trade unions and joint agreements,
exists. It has not been found that the conditions in such industries
are ideal, nor that friction between employers and the unions is un-
known ; nor has it been found that the employees in such industries
have entirely achieved economic, political, and industrial freedom, for
these ideals can not be gained until the fundamental changes in our
political and economic structure, which have already been referred to,
have in some way been accomplished. It has been found, however,
that the material conditions of the workers in such industries and
establishments are on a generally higher plane than where workers
are unorganized; that important improvements in such conditions
have been achieved as the direct result of organization ; that the friction
which exists in such industries and establishments has been reduced
rather than increased by organization ; and that the workers at least
have secured a basis upon which their political and economic freedom
may ultimately be established.
The evils of graft, " machine politics," factional fights, and false
leadership, which have been found sometimes to exist in such organ-
ized industries, are those which are inevitable in any democratic form,
of organization. They are the same evils which have accompanied
the development of the American Nation, and of its States and
municipalities. Such evils as we have found to exist are indeed
to be condemned, but a study of the history of these organizations
seems to show clearly that there is a tendency to eradicate them as
the organizations become stronger and as the membership becomes
more familiar with the responsibilities and methods of democratic
action. Furthermore, there is a fundamental principle which applies
in this field as in all other lines of human activity. This principle
is contained in the following contrast: In democratic organizations
such evils and excesses as may arise tend to disrupt and destroy the
organization and are therefore self -eradicating; while in an au-
tocracy, evils and excesses tend inevitably to strengthen the existing
autocrat and can be eradicated only in the event of a revolt on the
part of those who suffer from such evils. This is the history not
only of every form of artificial association, but of nations.
The fundamental question for the Nation to decide, for in the end
public opinion will control here as elsewhere, is whether the workers
shall have an effective means of adjusting their grievances, improv-
ing their condition, and securing their liberty, through negotiation
with their employers, or whether they shall be driven by necessity
and oppression to the extreme of revolt. Where men are well or-
ganized, and the power of employers and employees is fairly well
balanced, agreements are nearly always reached by negotiation; but,
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 67
even if this fails, the strikes or lockouts which follow are as a rule
merely cessations of work until economic necessity forces the parties
together again to adopt some form of compromise. With the unor-
ganized there is no hope of achieving anything except by spon-
taneous revolt. Too often has it been found that during the delay
of attempted negotiations the leaders are discharged and new men
are found ready to take the place of those who protest against condi-
tions. Without strike funds or other financial support the unor-
ganized must achieve results at once ; they can not afford to wait for
reason and compromise to come into play. Lacking strong leaders
and definite organization, such revolts can only be expected to change
to mob action on the slightest provocation.
Looking back over the industrial history of the last quarter cen-
tury, the industrial disputes which have attracted the attention of
the country and which have been accompanied by bloodshed and
violence have been revolutions against industrial oppression, and
not mere strikes for the improvement of working conditions.^ Such
revolutions in fact wrere the railway strikes of the late eighties, the
Homestead strike, the bituminous coal strike of 1897, the anthracite
strikes of 1900 and 1903, the strike at McKees Rocks in 1909, the
Bethlehem strike of 1910, the strikes in the textile mills at Lawrence,
Paterson, and Little Falls, many of the strikes in the mining camps
of Idaho and Colorado, the garment workers' strikes in New York
and other cities, and the recent strikes in the mining districts of West
Virginia, Westmoreland County, Pa., and Calumet, Mich.
As a result, therefore, not only of fundamental considerations but
of practical investigations, the results of which are described in detail
hereinafter, it would appear that every means should be used to
extend and strengthen organizations throughout the entire industrial
field. Much attention has been devoted to the means by which this
can best be accomplished, and a large number of suggestions have
been received. As a result of careful consideration, it is suggested
that the commission recommend the following action :
1. Incorporation among the rights guaranteed by the Constitution
of the unlimited right of individuals to form associations, not for the
sake of profit but for the advancement of their individual and col-
lective interests.
2. Enactment of statutes specifically protecting this right and pro-
hibiting the discharge of any person because of his membership in a
labor organization.
3. Enactment of a statute providing that action on the part of an
association of individuals not organized for profit shall not be held to
be unlawful where such action would not be unlawful in the case of
an individual.
4. That the Federal Trade Commission be specifically empowered
and directed by Congress, in determining unfair methods of compe-
tition to take into account and specially investigate the unfair treat-
ment of labor in all respects, with particular reference to the follow-
ing points :
(a) Refusal to permit employees to become members of labor or-
ganizations.
(?>} Refusal to meet or confer with the authorized representatives
of employees.
68 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
5. That the Department of Labor, through the Secretary of Labor
or any other authorized official, be empowered and directed to present
to the Federal Trade Commission, and to prosecute before that body
all cases of unfair competition arising out of the treatment of labor
"which may come to its attention.
6. That such cases, affecting as they do the lives of citizens in the
humblest circumstances, as well as the profits of competitors and the
peace of the community, be directed by Congress to have precedence
over all other cases before the Federal Trade Commission.
CONCLUSIONS AND RECOMMENDATIONS.
The remainder of the report is devoted largely to the conclusions
and recommendations with respect to specific questions propounded
by Congress. The facts upon which these conclusions and recom-
mendations are based are contained in the testimony taken by the
commission and in the reports of its investigators. The complete
corrected testimony is transmitted to Congress, as well as a carefully
prepared digest or the evidence. The reports of the investigators
have likewise been placed in the possession of Congress.1
I. INDUSTRIAL CONDITIONS or ADULT WORKMEN IN GENERAL
INDUSTRIES.
In this section only the conditions of adult workmen are consid-
ered, leaving the questions affecting women and children for separate
consideration later. The problems involved are essentially different,
and the position of women and children in relation to the State may
be clearly distinguished from the position of adult workmen.
WAGES.
As a result of the investigations which have been made the follow-
ing conclusions are justified :
1. The welfare of the State demands that the useful labor of every
able-bodied workman should, as a minimum, be compensated by suf-
ficient income to support in comfort himself, a wife, and at least three
minor children, and in addition to provide for sickness, old age, and
disability. Under no other conditions can a strong, contented, and
efficient citizenship be developed.
'2. Under existing conditions such an income is not received by
fully one-half of the wage earners employed in industry.
3. The natural resources of the United States are such that an
industrial population properly educated and efficiently organized can
produce enough to achieve this standard of living.
4. It is probable that even at present the national agricultural and
industrial output is sufficient to permit the establishment of such a
standard.
5. The problem is therefore essentially one of distribution.
6. The fixing of the wages of adult workmen by legal enactment is
not practicable nor desirable as a general policy, except for public
employees.
7. A just standard of wages in any industry or occupation can best
be reached by collective bargaining between employers and employees
1 These reports have not been printed with this document, on the recommendation of
Chairman Frank P. Walsh, as stated in his letter in Senate Report No. 143, Sixty-fourth
Congress.
EEPOET OF COMMISSION ON INDUSTRIAL RELATIONS. 69
for the purpose of forming voluntary joint agreements. The success
and justice of such joint agreements is, however, dependent upon the
essential equality of the two parties and can not be attained unless
effective organization exists.
It is suggested that the commission make the following recom-
mendations :
1. In order that the public may be kept fully informed with regard
to labor conditions, and that a proper basis of facts should exist for
negotiation and arbitration, the Federal Government should enact
the necessary legislation to provide for the collection, through the
Bureau of Labor Statistics or otherwise, of the full and exact facts
regarding wages, hours of labor, and extent of unemployment for
every industry. Every employer should be required by law to file
with the proper authority a sworn statement of these facts according
to a prescribed form. These statistics should be published annually,
and the full data regarding any industry or plant should be accessible
to any mediator or any other responsible citizen.
2. Uniform statutes should be passed by the legislatures of all
States requiring that wages be paid at least semimonthly and in cash,
except where by joint agreement other methods are agreed upon.
HOURS OF LABOR.
As a result of investigation the following conclusions are justified:
1. The physical well-being, mental development, and recreational
needs of every class of population demand that under normal circum-
stances the working day should not exceed eight hours.
2. A very large percentage of the workmen in manufactures,
transportation, and mining work more than eight hours per day.
3. This is in marked contrast to the condition of those whose
economic position enables them to define the length of their own
working day.
4. Practical experience has shown that the reduction of working
hours is in the interest not only of the worker and the community
generally, but of the employer.
5. The regulation by legal enactment of working hours of adult
workmen is not generally practicable nor desirable, except for public
employees.
It is suggested that the commission recommend :
1. That in the so-called continuous occupations, other than the
movement of trains, requiring work during both the day and the
night for six or seven days per week, the State and Federal Govern-
ments should directly intervene, so that the working hours should not
exceed eight per day nor extend to more than six days per week.
SAFETY AND SANITATION.
The investigations which have been made warrant the following
conclusions :
1. Great progress has been made during recent years in promoting
safety and sanitation in manufacturing, mining, and transportation.
2. The progress has been most rapid in the direction of safeguard-
ing workers from industrial accidents.
70 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
3. Progress in safety has been in part the result of continued
agitation and education, but has proceeded most rapidly and satis-
factorily since the enactment of workmen's compensation laws, which
render unsafe working conditions expensive to the employer.
4. The movement has also been largely promoted by the forma-
tion of safety committees composed of officials and workmen, and
by the creation of joint conferences of employers and employees to
assist and advise State officials in the administration of the law and
in the formulation of safety rules.
5. The campaign for safety needs, however, to be greatly ex-
tended as rapidly as possible. The annual list of accidents, approxi-
mately 35,000 fatalities and 700,000 injuries involving disability of
over four weeks, can not be regarded complacently. From one-third
to one-half of these accidents have been estimated by competent au-
thorities to be preventable by proper safeguards, inspection, and
control.
6. The advance in the sanitation of workshops has been less rapid,
because not only are the dangers less obvious, but there is no financial
liability for diseases or deaths occurring as the result of improper
sanitation. Future progress in sanitation demands attention not
only to cleanliness and ventilation but to occupational diseases.
7. The most direct incentive for the promotion of sanitation would
be the adoption of a proper system of sickness insurance.
It is suggested that the commission recommend :
1. The creation of a bureau of industrial safety (except that the
section providing a museum of safety is not indorsed). Proper steps
should be taken to provide for the coordination of the work of all
Federal bureaus whose work is concerned with industrial safety.
2. The appropriations of the Public Health Service for the investi-
gation and promotion of industrial sanitation should be increased.
HOUSING.
It has been found in the course of the commission's investigations :
1. The present provisions for the housing of workmen are gen-
erally bad, not only in the large cities but in industrial communities
of every size and in rural districts.
2. Xot only are the houses and tenements which are available for
workers largely insanitary and unfit for habitation but they are in-
adequate, resulting in high renjs, overcrowding, and congestion.
3. Such conditions make not only for discomfort and unhappiness,
but for disease and degeneration.
4. The ordinary method of supplying houses through their erec-
tion by private capitalists for investment and speculation has rarely,
if ever, been adequate.
5. Excellent plans for the housing of workmen have been put into
effect by a number of firms and corporations, but such measures have
not at all affected the general situation, and being dependent upon
the volition of individuals can not be regarded as likely to greatly
influence progress.
6. The tenement-house acts, as well as the health ordinances and
building regulations of municipalities, while generally productive
of good effects, are at best surface remedies and can never cure the
evils of the present housing situation.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 71
7. In every important European country Government aid and
direct intervention to curb speculation have proved to be necessary
for the promotion of any real progress.
8. Governmental action in Europe has chiefly taken the following
forms :
(a) Extension of credit to voluntary nonprofit-making associa-
tions.
(&) Construction by the Government of buildings which are
leased for long periods on easy terms.
(c) Exemption from taxation and other subsidies for homes con-
structed for occupancy by their owners.
(d) Legislation designed to prevent the holding of land out of
use and to secure for the Government a part of the " unearned in-
crement."
It is suggested that the commission recommend :
1. The Federal and State Governments should institute investiga-
tions directed not so much to ascertaining existing housing condi-
tions as to formulating constructive methods by which direct sup-
port and encouragement to the promotion of improved housing can
be given. Actual experiment in the promotion of housing should
proceed as rapidly as proper plans can be drafted.
2. Special attention should be given to taxation, in order that land
should as far as possible be forced into use and the burden of taxa-
tion be removed from home owners.
3. The municipalities should be relieved from all State restrictions
which now prevent them from undertaking the operation of adequate
housing schemes and from engaging in other necessary municipal
enterprises.
II. WOMEN AND CHILDREN IN INDUSTRY.
The investigations and hearings of the commission justify the
conclusions :
1. As a result of their unprotected condition, women and children
are exploited in industry, trade, domestic service, and agriculture
to an extent which threatens their health and welfare and menaces
the well-being of future generations.
2. The competition of women and children is a direct menace to
the wage and salary standards of men.
3. Under present conditions, children are permitted by their par-
ents to go to work largely because their earnings are necessary for
the support of the rest of the family. The restrictive legislation of
the past quarter century, although admirable in purpose and ultimate
results, has thrown a heavy burden upon the fathers and mothers,
who, at existing wages, have been barely able to support their fami-
lies. The evidence shows that the burden of child-labor legislation
has rested upon the wage earners rather than upon employers. It
is the testimony of enlightened employers that the employment of
children is unprofitable, and that the effect of excluding children
from factories has been to increase rather than decrease profits.
In the interests of society as a whole: further restrictions on the em-
ployment of immature children are necessary, but it is important that
they should be made with an understanding that the burden will rest
primarily upon the wage earners, whose self-sacrifice should be fully
recognized.
72 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
4. The increasing employment of women has been due to two pri-
mary causes : First, the low wages of men, which have made the earn-
ings of women necessary for the support of the family, and, second,
the inducement to employers to substitute women for men because
they will accept lower wages and are less likely to protest against
conditions. The substitution of women for men has been greatly
assisted by the introduction of improved machinery, which makes
strength and technical skill unnecessary.
5. The increased employment of women under present working
conditions is a serious menace to their own health and well-being,
to the wages of their husbands and brothers, and to the ideals of
family life upon which American civilization has been established.
6. The conditions under which women are employed in domestic
service and in agriculture merit the attention of the Nation no less
than does their employment in manufacturing and trade. Not only
is the economic condition of women employed in agriculture and
domestic service a matter of grave concern, but they are subject to
overwork, unreasonable hours, and personal abuse of various kinds,
from which they have been largely relieved in factories and stores
through agitation and legislation.
7. The position of women in industry has been rendered doubly
hard by reason of their lack of training for industrial work, by the
oversupply of such labor and the consequent competition, by their
traditional position of dependence, and by their disfranchisement.
8. A very thorough investigation in the 'New England States failed
to show a single manufacturer who had left a State as a result of
restrictive factory legislation. On the contrary, the majority of
manufacturers expressed the opinion that the legislation regulat-
ing conditions for women and children had been advantageous to
the industry as a whole, particularly because it placed all competi-
tors upon the same footing. Similarly an investigation of the
effects of minimum-wage legislation failed to show any calculable
effects upon the cost of production or upon the employment of women
after a sufficient period had elapsed to allow the necessary readjust-
ments to be made.
9. Nevertheless, there is a strong and increasing demand on the
part of manufacturers in the more progressive States that regula-
tion of factory conditions should be undertaken by the Federal Gov-
ernment, in order that competitors in all parts of the country should
be placed upon an equal footing in this respect. The same demand
comes also from the representatives of labor not only because the
argument of " interstate competition " is creating strong opposition
to progressive legislation, but because of the great economy of effort
which would result from having to make the fight for better legisla-
tion only at the National Capital instead of in 45 States.
It is suggested that the commission recommend :
1. The recognition both by public opinion and in such legislation
as may be enacted of the principle that women should receive the
same compensation as men for the same terms.
2. Until this principle is recognized and women are accorded equal
political rights, the extension of State protection of women, through
legislation regulating working conditions, hours of service, and
minimum wages, is highly desirable.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 73
3. The increased organization of working women for self -protec-
tion and the improvement of their industrial conditions.
4. The inclusion of all women wrorking for wages, whether in in-
dustry, trade, domestic service, or agriculture, under future legisla-
tion regulating their wages, hours, or working conditions.
5. The extension of the principle of State protection of children
and the rapid increase of facilities for their education as outlined
elsewhere.
6. The enactment by Congress of legislation embodying the prin-
ciples contained in the so-called Palmer-Owen bill, which was before
Congress at the last session.
III. INDUSTRIAL CONDITIONS AND RELATIONS ON PUBLIC UTILITIES.
GENERAL.
The investigations of the commission show :
1. The scope of the Newlands Act, which applies only to employees
engaged in the operation of interstate railroads, is top narrow and
leaves the public service in the transmission of intelligence and in
the handling of interstate commerce likely to be interrupted by
labor disputes without any adequate legal provision either for
mediation and conciliation or for making the facts involved in the
dispute known to the public.
2. Even as applied to train-service employees, the Newlands Act
provides no means of bringing the facts before the public, except
when both sides agree to arbitration.
3. The selection of impartial members of arbitration boards has
almost without exception devolved upon the Board of Mediation
and Conciliation, owing to the inability of the parties to agree. This
not only imposes an unpleasant and burdensome task upon the Board
of Mediation and Conciliation, but tends greatly to weaken its in-
fluence. The experience in Great Britain shows that agreement can
be reached by joint conference of employers and employees during
a period of industrial peace for the selection of a panel of impartial
persons from which arbitrators can be selected when they are needed,
and seems to indicate that in the United States the inability of the
parties to agree upon impartial arbitrators is due in part at least to
the fact that they are always selected during the heat of the conflict.
It is suggested that the commission recommend :
1. The extension of the Newlands Act to cover not only all classes
of railroad employees, but all employees of public-service corpora-
tions which are engaged in interstate commerce.
2. The functions of the Board of Mediation and Conciliation
under the Newlands Act should be extended to provide for the
creation of boards of investigation, to be formed only by consent of
both parties and to make a report of facts and recommendations
which will not be binding upon either side.
3. The Board of Mediation and Conciliation should be authorized
by Congress to create an advisory council, composed of equal num-
bers of employers and employees, for the purpose of creating a panel
of names from which impartial arbitrators may be chosen by the
Board of Mediation and Conciliation.
74 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
TELEGRAPH.
The investigations and hearings of the commission justify the
following conclusions :
1. The workers employed by the two principal telegraph com-
panies (the Western Union Telegraph and the Postal Telegraph-
Cable) are not only underpaid, as admitted by the highest officials
in their testimony before the commission, but subject to many abuses,
such as the denial of proper periods of relief while on duty; the
establishment of arbitrary speed rates, which frequently result in
overstrain; the arbitrary discharge of employees without notice for
any cause or no cause ; the employment of young boys for messenger
service under conditions which can result only in their moral cor-
ruption; and the employment of women for telegraph service at
night.
2. Such conditions have existed practically without change at least
since 1884, in spite of the facts having been made public by three
Government investigations.
3. The workers are practically unable to improve their condition
because these two companies, which control practically the entire
industry, deny them the right of organization. The suppression of
organization is effectively carried out by the discharge of all known
to be union men or union sympathizers, by the use of spies who
fraudulently secure the confidence of employees and report all known
to be union members or sympathizers, by the use of an effective sys-
tem of blacklisting, and by the control even of the personnel of the
operators upon leased wires in the offices of brokers and other private
individuals.
4. The two companies have a monopoly of the transmission of tele-
grams, and no effective competition exists between them. These com-
panies are performing a service in the transmission of intelligence
which has been held by the Federal Supreme Court to have been
reserved by the Constitution specifically to the Federal Government.
5. The telegraph companies are enormously overcapitalized, and
their rates, which are graded to pay dividends upon large amounts
of stock which do not represent the investment of cash, are very much
higher than the cost of service warrants.
6. Owing to the duplication of offices on the part of the two com-
panies and the maintenance of branch offices which are idle for a
large part of the time, this service is being performed inefficiently
and at an unusually high cost in spite of the low wages paid the
operators.
It is suggested that the commission recommend :
1. The property of the telegraph companies or such part of their
equipment as may be necessary for the efficient operation of a na-
tional telegraph system should be purchased by the Federal Govern-
ment after proper valuation and placed under the general jurisdic-
tion of the Post Office Department for operation.1 In transferring
the service to the Federal Government all employees, including offi-
cials and other persons, necessary for successful operation should be
retained, and those whom the elimination of the duplicate service
of 'the two companies renders unnecessary for the national system
1 The economic argument for the postalization of telegraphs and telephones is pre-
sented in the testimony of Hon. David J. Lewis before the commission.
EEPORT OF COMMISSION ON INDUSTRIAL RELATIONS, 75
should be absorbed into other branches of the Federal service as far
as practicable.
2. At the time of the transfer to the Federal service a special com-
mission should be appointed to revise the salary ratings and other
working conditions and place them upon a proper basis.
TELEPHONE.
The investigations of the commission are the basis for the follow-
ing statements:
1. The condition of the telephone operators in both interstate and
local service is subject to grave criticism. The wages paid even in
the cities having the highest standards are insufficient to provide
decently for women who have no other means of support. The re-
quirements and nervous strain incident to the service are so very
severe that experienced physicians have testified that operators
should work not more than five hours per day, whereas the regular
working hours are from seven to nine per day. The operators, who
are principally girls and young women, are required to work at night,
going to and returning from their work at hours when they are
subject to grave menace. The policy of the companies in general
provides for sanitary and reasonably comfortable working places
and for attention to the recreation and physical needs of the oper-
ators, but in a number of cities the conditions even in these respects
are subject to severe criticism.
2. The telephone operators are unable to secure reasonable condi-
tions for themselves because of their youth and the fact that they
ordinarily remain in the service only a short time.
3. The organization of employees for their own protection is effec-
tively resisted by the employing companies.
4. The American Telephone & Telegraph Co., with its subsidiary
and affiliated corporations, controls more than 70 per cent of the
total telephone business of the country. The American Telephone &
Telegraph Co. has been enormously profitable and is well able to
afford the necessary improvements in working conditions. The
American Telephone & Telegraph Co. has increased its capitaliza-
tion enormously without the investment of new capital.
5. The transaction by which the American Telephone & Telegraph
Co., which had been a subsidiary of the American Bell Telephone
Co., absorbed the parent company in 1899 was not only designed to
evade the legal limitations contained in the Massachusetts charter of
the American Bell Telephone Co., but resulted in the increase of the
capitalization of the combination from $25,886,300 to $75,276,600
without the addition of any new capital.
6. The transmission of intelligence is a function which is spe-
cifically reserved by the Constitution to the Federal Government,
but which in the telephone field has been permitted to become the
practical monopoly of a single corporation.
It is suggested that the commission recommend :
1. The purchase by the Federal Government, after proper valua-
tion, of the property of the interstate and local telephone companies,
or such part of their equipment as may be necessary for the efficient
operation of a national telephone system.
76 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
2. The transfer of all employees, including officials, necessary for
the efficient operation of the national telephone system to the Federal
service, as far as possible, and the absorption, as far as practicable,
of all employees who are not necessary for the telephone system into
other branches of the Federal service.
3. When such employees are transferred to the Federal service, the
creation of a special commission to establish salary ratings and other
working conditions on a proper basis.
4. In the meantime provision should be made by Congress for the
creation of a minimum wage board to fix minimum wage standards
for women employees who are engaged in the transmission of mes-
sages in interstate commerce. The board should be authorized to
differentiate between localities in fixing minima, if on due considera-
tion such differential rates should be deemed advisable.
5. The creation of minimum wTage boards in the several States to
fix minimum wages for all women employees engaged in service
within the State.
THE PULLMAN CO.
The investigations and hearings of the commission developed the
following facts:
1. The conductors and porters employed in the car service of the
Pullman Co. are employed under conditions which seem to require
radical readjustment. Both classes of employees are admitted by
officials of the company to be underpaid.
The standard salary of the porters ($27.50 per month) is such that
the porters are obliged to secure tips from the public in order to live.
The Pullman Co. is admitted by the chairman of the board of direc-
tors to be the direct beneficiary of the tips from the public to the
extent of the difference between a fair wage and that which is now
paid.
The hours of service are extremely long, the regulations of the
company allowing porters and conductors when in service only four
hours' sleep per night and penalizing them severely if they sleep
W7hile on duty. Employees of the Pullman Co. are subject to many
other abuses, among which may be mentioned the arbitrary deduc-
tion from their salaries for such time as they may not be needed
for the actual service of the company, although they are required to
report at the office each morning and are sometimes compelled to
wait the greater part of the day without compensation ; the require-
ment that porters shall furnish "blacking, although they are not per-
mitted to charge passengers for the service of shoe cleaning; the
system of arbitrary penalties for the infraction of multitudinous
rules; the requirement that all employees shall purchase their uni-
forms from one mercantile establishment, the owners of which are
largely interested in the Pullman Co.; and the lack of proper pro-
vision of sleeping quarters for employees when away from their home
stations.
2. The Pullman Co. has a bonus system by which employees who
have a " clean record " for the year receive an extra month's salary.
This system serves to increase the earnings of those who receive the
bonus, and is unquestionably appreciated by them. Nevertheless it
is inequitable in penalizing with extra severity any infractions of
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 77
rules which occur during the latter half of the year, and puts into
the hands of officials and inspectors a means of discrimination which
can be arbitrarily exercised.
3. The effect of the tipping system is not only to degrade those
who are obliged by their economic conditions to accept tips but to
promote discrimination in the service of the public.
4. The employees of the Pullman Co. are unable to improve their
condition through organization, as employees known to be members
of labor unions are discharged, and through the means of an effective
system of espionage employees^ are deterred from affiliating with
labor unions.
5. The company is tremendously overcapitalized, having increased
its capitalization from $36,000,000 in 1893 to $120,000,000 in 1915,
without the investment of a single dollar on the part of the stock-
holders. Upon the basis of actual cash paid in, the annual dividends
of the company are not less than 29 per cent. During the history
of the company the stockholders have received cash dividends
amounting to at least $167,000,000 and special stock dividends of
$64,000,000, making a total of $231,000,000 on an actual investment of
$32,601,238.
6. The company enjoys a practical monopoly of the sleeping-car
service.
It is suggested that the commission recommend :
1. The enactment by Congress of a statute prohibiting the tipping
of any employee of a public-service corporation engaged in interstate
commerce and providing a proper fine for both the giver and the
recipient of the tip.
2. The amendment of the existing law regulating the hours of
service of train employees to include the employees engaged in the
Pullman service.
3. The extension of the Newlands Act, as already suggested, to
cover the Pullman Co.
RAILROADS.
The investigations of the commission with regard to railroads
have been too limited to permit of general findings or recommen-
dations. Enough evidence has, however, come before the commission
with regard to three points to warrant attention.
1. The railroad construction camps are largely insanitary, over-
crowded, and improperly equipped for the health and comfort of
the employees. In addition, there are many abuses, such as over-
charging at the commissary and grafting by foremen.
2. The so-called voluntary benefit associations of a number of the
railroads constitute, under the present system of management, a great
injustice to employees. These funds, which are contributed almost
entirely by the employees, the management as a rule paying only the
cost of administration, until recently were generally used to relieve
the companies from liability for accident, employees being required
to sign a release in favor of the company at the time that they became
members of the benefit association. In some cases, even, the member-
ship is compulsory. Nevertheless, the employees have no voice in
the management and receive no equity when they are discharged.
Finally, such associations, under their present management, serve to
78 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
exert an undue influence over employees, since the members, if they
quit the service for any period or for any cause, sacrifice to the com-
pany all that has been paid in.
3. Under the authority granted by the several States the railroads
maintain a force of police, and some, at least, have established large
arsenals of arms and ammunition. This armed force, when aug-
mented by recruits from detective agencies and employment agencies,
as seems to be the general practice during industrial disputes, consti-
tutes a private army clothed with a degree of authority which should
be exercised only by public officials ; these armed bodies, usurping the
supreme functions of the State and oftentimes encroaching on the
rights of the citizens, are a distinct menace to public welfare.
It is suggested that the commission recommend :
1. Thorough investigation by the Public Health Service of rail-
road construction camps as well as other labor camps, and the prepa-
ration of definite plans for such camps and a standard code of sani-
tary regulations.
2. The enactment by Congress of a statute expressly prohibiting
corporations engaged in interstate commerce from inducing or com-
pelling their employees to sign releases of liability for accidents.
3. Congress should enact a statute prohibiting interstate employ-
ers from requiring their employees to contribute to benefit funds,
and providing for the participation of employees engaged in inter-
state commerce in the management of all benefit funds and other
funds to which they contribute.
4. The regulation by Federal statute of the employment of police
on interstate railroads. The statute should not only provide for the
organization, personnel, and powers of such police, but should defi-
nitely provide that during labor disputes such police should be sub-
ject to the proper civil authorities and paid out of the public treas-
ury. The statute should also provide that such corporations should
be permitted to have firearms only under license, requiring that a
definite record be maintained showing the character of each firearm
and to whom it is issued.
5. The assumption by the States of full responsibility and definite
provision not only for protecting the property of railroads, but for
preventing trespass upon their property.
IY. INDUSTRIAL, CONDITIONS IN ISOLATED COMMUNITIES.
The investigations and hearings of the commission are the basis
for the following statements :
1. The conditions existing in typical industrial communities which
are either wholly or in large part owned or controlled by a single
corporation or individual employer, present every aspect of a state
of feudalism except the recognition of specific duties on the part of
the emplo37er. The employees in such communities are dependent on
a single corporation, or employer, for their livelihood. Furthermore,
the employer in many cases controls the social and political life or
such communities, either by the complete absorption of local political
powers or by domination of the local authorities.
2. The fundamental rights of citizens in such communities are, as
a general rule, seriously abridged, if not actually denied. Among
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 79
the rights most seriously violated are the right of free speech and
assemblage and the right of public highways.
In some cases. as, for example, in Colorado, employers in such com-
munities have assumed to usurp the functions of the Federal Gov-
ernment itself in the issuance of money orders, and have not only
denied emploj^ees access to the post office when located in their com-
pany stores but have opened and otherwise interfered with the mail
directed to the employees.
Such feudalistic conditions tend to develop principally in connec-
tion with the private exploitation of natural resources, being most
frequently found in mining camps, lumber camps (including turpen-
tine camps), and large plantations. There are, however, striking
examples even in the case of manufactures, as, for examples, the tex-
tile towns and steel towns.
3. The most extreme form of domination and control exists in
what are known as " closed camps," where the employer owns all the
land upon which such camps are located and, because of this private
ownership, not only exercises control over the local government but
dictates arbitrarily who shall be permitted to come into or pass
through such communities. It has frequently been argued that such
communities are simply the inevitable accompaniment of the develop-
ment of new country and will be eliminated with time. This is not
true, however, as the commission's investigations have disclosed a
large number of " closed camps " which have been in existence for
more than a generation.
It is suggested that the commission recommend :
1. The enactment of appropriate State legislation providing that
where communities develop, even upon privately owned land, the
powers of the civil government shall not be interfered with, nor
shall the rights of access to the residence of any person be restricted,
nor shall the rights of persons to come and go unmolested, to speak
freely and to assemble peacefully, be interfered with or considered
to stand upon a different basis from the rights of persons in other
communities.
2. In the case of public lands containing timber or minerals, which
are now or may hereafter come into the possession of the Federal
Government, it should be provided by statute that neither the lands
nor the mineral rights should under any circumstances be sold, but
should be used only upon lease for a limited term, such lease to
contain as a part of the contract the conditions with regard to the
rights of inhabitants as recited above and such lease to be f orfeitable
without recourse in case of the infraction of said conditions.
3. The Post Office Department should be directed to report to
Congress all communities in which the post office is in any company's
store or other building operated by an employer or in which the post-
master is a private employer or the agent of an employer. The
report should show the facts separately for those communities in
which the employer or corporation operates an industry upon which
any large number of inhabitants are dependent.
4. Congress and the State legislatures should enact statutes pro-
viding that any attempt on the part of an employer to influence his
employees, either directly or indirectly, in connection with any Fed-
eral election, either for or against any particular candidate, shall
80 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
constitute intimidation; and further specifying that it shall con-
stitute intimidation for any employer to give notice to his workmen
that in the event of the election of any particular candidate the
establishment will not be operated.
V. THE CONCENTRATION OF WEALTH AND INFLUENCE.
The evidence developed by the hearings and investigations of the
commission is the basis for the following statements :
1. The control of manufacturing, mining, and transportation in-
dustries is to an increasing degree passing into the hands of great
corporations through stock ownership, and control of credit is cen-
tralized in a comparatively small number of enormously powerful
financial institutions. These financial institutions are in turn dom-
inated by a very small number of powerful financiers.
2. The final control of American industry rests, therefore, in the
hands of a small number of wealthy and powerful financiers.
3. The concentration of ownership and control is greatest in the
basic industries upon which the welfare of the country must finally
rest.
4. With few exceptions each of the great basic industries is dom-
inated by a single large corporation, and where this is not true the
control of the industry through stock ownership in supposedly inde-
pendent corporations and through credit is almost, if not quite, as
potent.
5. In such corporations, in spite of the large number of stock-
holders, the control through actual stock ownership rests with a very
small number of persons. For example, in the United States Steel
Corporation, which had in 1911 approximately 100,000 shareholders,
1.5 per cent of the stockholders held 57 per cent of the stock, while
the final control rested with a single private banking house.
Similarly, in the American Tobacco Co., before the dissolution, 10
stockholders owned 60 per cent of the stock.
6. Almost without exception the employees of the large corpora-
tions are unorganized, as a result of the active and aggressive
" nonunion " policy of the corporation managements.
Furthermore, the labor policy of the large corporations almost in-
evitably determines the labor policy of the entire industry.
7. A careful and conservative study shows that the corporations
controlled by six financial groups and affiliated interests employ
2,6ol,684 wage earners and have a total capitalization of $19,875,-
200,000. These six financial groups control 28 per cent of the total
number of wage earners engaged in the industries covered by the
report of our investigation. The Morgan-First National Bank group
alone controls corporations employing 785,499 wage earners. That
this control is effective is shown by the following telegram from
J. P. Morgan to E. H. Gary :
Aix LES BAINS.
E. H. GARY, New York:
Have received yo;ir cable of yesterday. My own views are in accordance
with those of the financial committee in New York. Certainly until question of
wages has been settled by the coal and railroads, which still in abeyance, but
settlement seems imminent. Whole question wages should be settled simul-
taneously by all interests if possible. Going Paris Wednesday. Will see there
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 81
EL C. Fv P. A. B. W., * and will cable you result of interview. If possible and
meets your approval, think better wait until after interview. Perfectly delight-
ful here. Weather superb.
J. P. M.2
8. The lives of millions of wage earners are therefore subject to the
dictation of a relatively small number of men.
9. These industrial dictators for the most part are totally ignorant
of every aspect of the industries which they control except the fin-
ances, and are totally unconcerned with regard to the wrorking and
living conditions of the employees in those industries. Even if they
were deeply concerned, the position of the employees would be
merely that of the subjects of benevolent industrial despots.
10. Except, perhaps, for improvements in safety -and sanitation,
the labor conditions of these corporation-controlled industries are sub-
ject to grave criticism and are a menace to the welfare of the Nation.
11. In order to prevent the organization of employees for the
improvement of working conditions, elaborate systems of espionage
are maintained by the large corporations which refuse to deal with
^abor unions, and employees suspected of union affiliation are dis-
charged.
12. The domination by the men in whose hands the final control of
a large part of American industry rests is not limited to their em-
ployees, but is being rapidly extended to control the education and
u social service " of the Nation.
13. This control is being extended largely through the creation of
enormous privately managed funds for indefinite purposes, herein-
after designated " foundations," by the endowment of colleges and
universities, by the creation of funds for the pensioning of teachers,
by contributions to private charities, as well as through controlling
or influencing the public press.
14. Two groups of the " foundations," namely, the Rockefeller and
Carnegie foundations, together have funds amounting to at least
$250,000,000, yielding an annual revenue of at least $13,500,000,
which is at least twice as great as the appropriations of the Federal
Government for similar purposes, namely, education and social
service.
15. The funds of these foundations are exempt from taxation, yet
during the lives of the founders are subject to their dictation for any
purpose other than commercial profit. In the case of the Rockefeller
group of foundations, the absolute control of the funds and of the
activities of the institutions now and in perpetuity rests with Mr.
Rockefeller, his son, and whomsoever they may appoint as their
successors.
16. The control of these funds has been widely published as being
in the hands of eminent educators and public-spirited citizens. In
the case of the Rockefeller foundations, however, not only is the con-
trol in the hands of Mr. John D. Rockefeller, jr., and two of the
members of the personal staff of Mr. John D. Rockefeller, sr.. who
constitute the finance committee, but the majority of the trustees of
the funds are salaried employees of Mr. Rockefeller or the founda-
i H. C. Frick and P. A. B. Widener.
-Read at meeting of finance committee, United States Steel Corporation, April 27,
1909.
38819°— 16 6*
82 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
tions, who are subject to personal dictation and may be removed at
any moment.
17. The funds of these foundations are largely invested in se-
curities of corporations dominant in American industry, whose posi-
tion has been analyzed under the early headings of this section. The
policies of these foundations must inevitably be colored, if not con-
trolled, to conform to the policies of such corporations.
18. The funds of the foundations represent largely the results
either of the exploitation of American workers through the payment
of low wages or of the exploitation of the American public through
the exaction of high prices. The funds, therefore, by every right be-
long to the American people.
19. The powers of these foundations are practically unlimited, ex-
cept that they may not directly engage in business for profit. In
the words of President Schurman, of Cornell, himself a trustee of
the Carnegie foundation.
Under the terms of this broad charter .there is scarcely anything
which concerns the life and work of individuals or nations in
which the Eockefeller foundation would not be authorized to par-
ticipate. As the safety of the State is the supreme condition of
national civilization the foundation might in time of war use its
income or its entire principal for the defense of the Republic. In
time of peace it might use its funds to effect economic and political
reforms which the trustees deem essential to the vitality and effi-
ciency of the Republic. The foundation might become the champion
of free trade or protection, of trusts, or of the competing concerns
out of which they grow, of socialism or individualism, of the pro-
gram of the Republican Party or the program of the Democratic
Party. It might endow the clergy of all religious denominations, or
it might subsidize any existing or any new religous denomination.
To-morrow it might be the champion of the Christian religion, and
a hundred years hence furnish an endowment for the introduction of
Buddhism into the United States. It might build tenement houses
for the poor in New York City, or carry the results of science to
enrich the exhausted soils of the East or the arid tracts of the West
It might set up an art gallery in every State of the United States
or endow universities which would rival the great State universities
of the West. With the consent of the legislature it might relieve
any State of the care of its insane, pauper, and dependent classes or
construct roads for the benefit of farmers and motorists. These may
not be likely objects for the application of the funds of the Rocke-
feller foundation. I am hot, however, attempting to forecast its
work but to understand its charter.
And, so far as I can see, the proposed charter would authorize all
these and a multitude of similar activities. If the object of the
Rockefeller Foundation is to be coextensive with human civilization,
then it may do anything and everything which its trustees think
likely to effect reform or improvement in the material, economic,
intellectual, artistic, religious, moral, and political conditions of the
American people or of mankind.
20. The charters of these foundations, with their almost unlimited
powers, were granted under conditions of such laxity that it has been
testified by an eminent legal authority who made an extensive investi-
gation that those granted by New York State are legally defective
BEPOBT OF COMMISSION ON INDUSTRIAL RELATIONS. 83
and unconstitutional. Furthermore, evidence developed by the hear-
ings of the commission showed that in increasing the number of its
trustees without complying with the requirements of the law govern-
ing corporations the Rockefeller Foundation has already been guilty
of a breach of the law.
21. These foundations are subject to no public control, and their
powers can be curbed only by the difficult process of amending or
revoking their charters. Past experience, as, for example, in the
case of the insurance companies, indicates that the public can be
aroused only when the abuses have become so great as to constitute a
scandal.
22. The entrance of the foundations into the field of industrial
relations, through the creation of a special division by the Rocke-
feller Foundation, constitutes a menace to the national welfare to
which the attention not only of Congress but of the entire country
should be directed. Backed by the $100,000,000 of the Rockefeller
Foundation, this movement has the power to influence the entire
country in the determination of its most vital policy.
23. The documentary evidence in the possession of the commission
indicates :
(a) That the so-called " investigation of industrial relations " has
not, as is claimed, either a scientific or a social basis, but originated
to promote the industrial interests of Mr. Rockefeller. The original
letter inviting Mr. W. L. Mackenzie King to associate himself with
the Rockefellers stated that Mr. Rockefeller and Mr. Greene in " their
purely corporate capacity as owners and directors of large in-
dustries " desired his aid.
(b) That the investigation forms part of what Mr. Rockefeller,
in a letter to Mr. Ivy L. Lee (the press agent of the Colorado opera-
tors) , called the " union educational campaign," which is referred to
by Mr. Bowers as " the fight for the open shop," the results of which
are clearly manifested in the conditions existing in the camps of the
Colorado Fuel & Iron Co., conducted on the " open-shop " principle.
(<?) That Mr. Rockefeller planned to utilize in this campaign
literature containing statements which were known to him at the time
to be untrue and misleading (as, for example, the numerous misstate-
ments in the " Sermon to young men " of Dr. Newall Dwight Hillis,
including the statement that the Colorado operators offered to recog-
nize the miners' union), and also literature containing statements
which constituted a malicious libel upon a large body of American
citizens — for example, the following statement of f*rof. John J.
Stevenson :
Labor unions defy the law, but are ever ready to demand its protection;
their principles are no better than those of the India thugs, who practiced
robbery and murder in the name of the goddess Cali.
(d) That the investigation of industrial relations is not being made
in good faith, inasmuch as its director states that he will not now nor
hereafter make public his findings regarding a most important part
of his investigation, namely, the investigation in Colorado.
24. The purpose of Mr. Rockefeller to influence the public press
is clearly shown by the employment of an experienced publicity
expert as a member of his personal staff, and is indicated by his
evident interest in the ownership or control of a number of publica-
tions, of which we have records dating from the inquiry of his
84 BEPOBT OF COMMISSION ON INDUSTRIAL RELATIONS.
secretary regarding the Pueblo Star Journal in May, 1913, to the
extensive conferences regarding a loan of $125,000 to finance the
Nation's Business, the organ of the National Chamber of Commerce,
which was established and given a semiofficial status through the
instrumentalities of the Secretary of Commerce and Labor, with the
sanction of a former President of the United States.
25. The extent of the possible influence of these foundations and
private endowments of institutions for education and public service
is shown by a large amount of evidence in the possession of the com-
mission. The following examples may be cited :
(a) The adoption of a definite line of policy by the Bureau of
Municipal -Research of New York to meet the conditions imposed by
Mr. Rockefeller in connection with proposed contributions.
(5) The abandonment by several colleges and universities of sec-
tarian affiliations and charter clauses relating to religion in order to
secure endowments from the Carnegie Corporation and pensions for
professors from the Carnegie Foundation for the Advancement of
Teaching. It would seem conclusive that if an institution will will-
ingly abandon its religious affiliations through the influence of these
foundations, it will even more easily conform to their will any other
part of its organization or teaching.
26. Apart from these foundations there is developing a degree of
control over the teachings of professors in our colleges and univer-
sities which constitutes a most serious menace. In June of this year
two professors, know throughout their professions as men of great
talent and high character, were dropped from the positions they
had occupied and no valid reason for such action was made public.
Both were witnesses before the commission, and made statements
based upon their own expert knowledge and experience which were
given wide publicity. One was a professor of law in a State univer-
sity, who had acted as counsel for the strikers in Colorado; the other
a professor of economics, who had not only been active in fights in
behalf of child-labor legislation and other progressive measures, but
had recently published a work comparing the income paid for prop-
erty ownership with the income paid for all classes of service.
In the case of the State university we know that the coal operators
in conjunction with other business interests had gained the ascend-
ancy and exercised a great degree of control over the former governor
of the State, that the coal operators were bitterly opposed to the
professor in question, and that the dismissal of the professor had been
publicly urged by the operators upon numerous occasions, and we
nave the uncontroverted statement of the professor that he had been
warned that if he testified before the commission he would not be
reappointed. In the case of the professor in the other university
(which, though privately endowed, receives large appropriations
from the State) we know that its trustees are interested in corpora-
tions which have bitterly opposed progressive legislation, and are
men whose incomes are derived from property ownership and not
from service.
In the face of such an enormous problem one can only frankly
confess inability to suggest measures which will protect the Nation
from the grave dangers described. It is believed, however, that if
Congress will enact the measures already recommended, providing
for a heavy tax on large inheritances with a rigid limitation on the
KEPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 85
total amount of the bequest, for the reclamation by the Federal
Government of all parts of the public domain (including mineral
rights) which have been secured by fraud, and for a tax on non-
productive land and natural resources, a great step in the right
direction will have been taken.
As regards the " foundations " created for unlimited general pur-
poses and endowed with enormous resources, their ultimate possi-
bilities are so grave a menace, not only as regards their own activities
and influence but also the benumbing effect1 which they have on
private citizens and public bodies, that if they could be clearly dif-
ferentiated from other forms of voluntary altrustic effort it would
be desirable to recommend their abolition. It is not possible, how-
ever, at this time to devise any clear-cut definition upon which they
can be differentiated.
As the basis for effective action, it is suggested that the commission
recommend :
1. The enactment by Congress of a statute providing that all
incorporated nonprofit-making bodies whose present charters em-
power them to perform more than a single specific function and
whose funds exceed $1,000,000 shall be required to secure a Federal
charter.
The Federal charter should contain the following provisions :
(a) Definite limitation of the funds to be held by any organiza-
tion, at least not to exceed the largest amount held by any at the
time of the passage of the act.
(b) Definite and exact specifications of the powers and functions
which the organization is empowered to exercise, with provision for
heavy penalties if its corporate powers are exceeded.
(c) Specific provision against the accumulation of funds by the
compounding of unexpended income and against the expenditure in
any one year of more than 10 per cent of the principal.
(d) Rigid inspection of the finances as regards both investment
and expenditure of funds.
(e) Complete publicity through open reports to the proper Gov-
ernment officials,
(/) Provision that no line of work which is not specifically and
directly mentioned in the articles of incorporation shall be entered
upon without the unanimous consent and approval of the board of
trustees, nor unless Congress is directly informed of such intention
through communication to the Clerk of the House and the Clerk of
the Senate, which shall be duly published in the Congressional
Record, nor until six months after such intention has been declared,
2. Provision by Congress for the thorough investigation, by a
special committee or commission, of all endowed institutions, both
secular and religious, whose property holdings or income exceeds a
moderate amount. The committee or commission should be given
full power to compel the production of books and papers and the
attendance and testimony of witnesses. It should be authorized and
directed to investigate not only the finances of such institutions but
all their activities and affiliations.
1 A striking illustration of the benumbing effect of such foundations was revealed by
the almost complete cessation of private activity for the relief of the Belgians as soon
as the Rockefeller Foundation issued to the press a statement of its intention to under-
take such relief.
86 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
3. As the only effective means of counteracting the influence of the
foundations, as long as they are permitted to exist, consists in the
activities of governmental agencies along similar lines, the appro-
priations of the Federal Government for education and social service
should be correspondingly increased.
VI. THE LAND QUESTION AND THE CONDITION OF AGRICULTURAL LABOR.
It was obviously impossible for the commission to attempt a de-
tailed investigation of agricultural condition, but because of the
very immediate bearing of the land question on industrial unrest, it
was felt necessary to make as thorough investigation as possible of
the phases which seemed to have the most direct bearing on our gen-
eral problem. The phases selected for discussion were, first, the con-
centration of land ownership as shown by existing statistics ; second,
the problem of seasonal and casual agricultural labor; third, the in-
crease and change in the character of farm tenancy ; and, fourth, the
introduction of industrial methods into agriculture through the de-
velopment of corporations operating large tracts of land. The find-
ings and recommendations with reference to the concentration of
ownership and the problems of seasonal labor are set forth elsewhere.
At this point it is desired to present the results of the investigations
of tenancy and agricultural corporations.
The investigation of these problems was confined practically to the
Southwest, because it is in this region that the systems have become
most fully developed and their results in the form of the acute unrest
of a militant tenant movement are most easily studied. The investi-
gations in this region, however, were very thorough, consisting of de-
tailed studies and reports by field investigators, which were later
confirmed by a public hearing.
As a result of these investigations the following conclusions are
fully justified:
1. Tenancy in the Southwestern States is already the prevailing
method of cultivation and is increasing at a very rapid rate. In 1880
Texas had 65,468 tenant families, comprising 37.6 per cent of all
farms in the State. In 1910 tenant farmers had increased to 219.571
and operated 53 per cent of all farms in the State. Reckoning on
the same ratio of increase that was maintained between 1900 and
1910, there should be in Texas in the present year (1915) at least
236,000 tenant farmers. A more intensive study of the field, however,
shows that in the 82 counties of the State where tenancy is highest
the average percentage of tenants will approximate 60.
For Oklahoma we have not adequate census figures so far back,
but at the present time the percentage of farm tenancy in the State
is 54.8, and for the 47 counties where the tenancy is highest the per-
centage of tenancy is 68.13.
2. Tenancy, while inferior in every way to farm ownership from
a social standpoint, is not necessarily an evil if conducted under a
system which protects the tenants and assures cultivation of the soil
under proper and economical methods, but where tenancy exists
under such conditions as are prevalent in the Southwest, its increase
can be regarded only as a menace to the Nation.
3. The prevailing system of tenancy in the Southwest is share
tenancy, under which the tenant furnishes his own seed, tools, and
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 87
teams and pays the landlord one-third of the grain and one-fourth
of the cotton. There is, however, a constant tendency to increase the
landlord's share through the payment either of cash bonuses or of a
higher percentage of the product. Under this system tenants as a
class earn only a bare living through the work of themselves and their
entire families. Few of the tenants ever succeed in laying by a sur-
plus. On the contrary, their experiences are so discouraging that
they seldom remain on the same farm for more than a year, and
they move from one farm to the next, in the constant hope of being
able to better their condition. Without the labor of the entire family
the tenant farmer is helpless. As a result, not only is his wife prema-
turely broken down, but the children remain uneducated and without
the hope of any condition better than that of their parents. The
tenants having no interest in the results beyond the crops of a single
year, the soil is being rapidly exhausted and the conditions, there-
fore, tend to become steadily worse. Even at present a very large
proportion of the tenants' families are insufficiently clothed, badly
housed, and underfed. Practically all of the white tenants are native
born. As a result of these conditions, however, they are deteriorating
rapidly, each generation being less efficient and more hopeless than
the one proceeding.
4. A very large proportion of the tenants are hopelessly in debt
and are charged exorbitant rates of interest. Over 95 per cent of
the tenants borrow from some source, and about 75 per cent borrow
regularly year after year. The average interest rate on all farm
loans is 10 per cent, while small tenants in Texas pay 15 per cent or
more. In Oklahoma the conditions are even worse, in spite of the
enactment of laws against usury. Furthermore, over 80 per cent of
the tenants are regularly in debt to the stores from which they secure
their supplies, and pay exorbitantly for this credit. The average
rate of interest on store credit is conservatively put at 20 per cent
and in many cases ranges as high as 60 per cent.
5. The leases are largely in the form of oral contracts which run
for only one year and which make no provision for compensation
to the tenant for any improvements which may be made upon the
property. As a result, tenants are restrained from making improve-
ments, and in many cases do not properly provide for the upkeep of
the property.
6. Furthermore, the tenants are in some instances the victims of
oppression on the part of landlords. This oppression takes the form
of dictation of character and amount of crops, eviction without due
notice, and discrimination because of personal and political convic-
tions. The existing law provides no recourse against such abuses.
7. As a result both of the evils inherent in the tenant system and
of the occasional oppression by landlords, a state of acute unrest is
developing among the tenants and there are, clear indications of the
beginning of organized resistance which may result in civil dis-
turbances of a serious character.
8. The situation is being accentuated by the increasing tendency
of the landlords to move to the towns and cities, relieving themselves
not only from all productive labor, but from direct responsibility for
the conditions which develop. Furthermore, as a result of the in-
creasing expenses incident to urban life there is a marked tendency
88 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
to demand from the tenant a greater share of the products of his
labor.
9. The responsibility for the existing conditions rests not upon the
landlords, but upon the system itself. The principal causes are to
be found in the system of short leases, the system of private credit
at exorbitant rates, the lack of a proper system of marketing, the ab-
sence of educational facilities, and last but not least the prevalence
of land speculation.
10. A new factor is being introduced into the agricultural situa-
tion through the development of huge estates owned by corporations
and operated by salaried managers upon a purely industrial system.
The labor conditions on such estates are subject to grave criticism.
The wages are extremely low, 80 cents per day being the prevailing
rate on one large estate which was thoroughly investigated ; arbitrary
deductions from wages are made for various purposes; and a con-
siderable part of the wages themselves are paid in the form of
coupons, which are in all essential particulars the same as the " scrip "
which has been the source of such great abuse. Furthermore, the
communities existing on these large estates are subject to the com-
plete control of the land-owning corporation, which may regulate
the lives of citizens to almost any extent. There is an apparent tend-
ency toward the increase of these large estates, and the greatest
abuses may be expected if they are allowed to develop unchecked.
11. Prompt and effective action on the part of the States and
Nation is necessary if any alleviation of the conditions which have
been described is to be achieved.
It is suggested that the commission recommend :
1. The development through legislation of longer time farm
leases that will make for fair rents, security of tenure, and protection
of the interests of the tenant in the matter of such improvements as
he may make on a leasehold in his possession. Such legislation
should look forward to leasing systems that will increase tillage,
improve the yielding powers of the soil and maintain a greater popu-
lation.
In order to secure this desired end it is suggested that the commis-
sion further recommend the creation of :
2. National and State land commissions with powers —
(a) To act as land courts with powers to hear evidence given by
landlord and tenants as to questions that have to do with fair rents,
fixity of tenure and improvements made by tenants on landlords'
property ; to gather evidence, independently of both parties, that will
the better enable such land courts to arrive at the true facts in each
case ; and to render judgment that will be mandatory for such time
as the contractual relationship may be determined to hold.
(b) To operate farm bureaus for the following purposes:
First. To act as an agent between landlords and tenants in the
distribution of tenant labor.
Second. To act as an agent between landlords and tenants in the
preparation of equitable contracts.
Third. To act as an information agency to assist home-seeking
farmers.
Fourth. To assist in the distribution of seasonal labor.
EEPOBT OF COMMISSION ON INDUSTRIAL RELATIONS. 89
3. The development of better credit facilities through the assist-
ance of the Government and cooperative organization of farmers
and tenants. No single measure can be recommended; the results
must be achieved through the development of a sound rural-credit
system, the development of land banks, mortgage associations and
credit unions. Foreign experience shows that through these means
the rate of interest can be greatly reduced and the security of both
the borrower and the lender can be increased.
4. The general introduction of modernized rural schools and com-
pulsory education of children. The functions of the school system
shoulol extend beyond education to the social service of the entire
rural community, assisting in the organization of farmers and ten-
ants for cooperative purposes, and promoting other measures looking
to the community's welfare.
5. The revision of the taxation system so as to exempt from taxa-
tion all improvements and tax unused land at its full rental value.
VII. JUDICIAL SETTLEMENT OF LABOR CLAIMS AND COMPLAINTS.
The investigations of the commission are the basis for the follow-
ing statements:
1. Among workers of every class there are constantly arising va-
rious questions for judicial settlement wyhich under present condi-
tions can not be speedily or satisfactorily adjusted.
2. These claims are of a very diverse character and include not
only cases of actual injustice through the retention of wages, but
questions of interpretation of contract and the establishment of
justice in cases in which contracts are lacking.
3. The ordinary courts are unfitted to decide such questions, not
only because of the method of procedure but because of the unf amili-
arity of ordinary magistrates and judges with the conditions in-
volved in such claims.
It is suggested that the commission recommend :
1. The establishment either by the States or by municipalities of
industrial courts similar to those which have proved to be successful
in European countries. The organization and method of procedure
of such courts are described in detail in Bulletin No. 98 of the
United States Bureau of Labor and need not be discussed here.
2. The Commissioners of Labor or the industrial commissions of
the several States should be authorized and directed, where such
powers do not now exist, to receive the legal complaints of all classes
of workmen, and, where they are found to have a proper basis, to
prosecute such claims vigorously, with a view to securing either a
voluntary settlement or the award of adequate recompense by the
proper tribunal. The commissioners of labor or the industrial com-
missions should be given adequate legal assistance to enable them to
prosecute such claims promptly and vigorously. Proper steps should
be taken to provide for cooperation with the Federal Immigration
Bureau, if the recommendation on page 51 is adopted.
3. The States and municipalities should consider the desirability
of creating an office similar to that of the public defender in Los
Angeles tot act in civil claims of small size.
90 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
VIII. THE LAW RELATING TO TRADE-UNIONS AND INDUSTRIAL
DISPUTES.
The commission has conducted through its agents extensive investi-
gations and has held hearings at which the persons who have devoted
great study to the question of trade-union law testified at length.
The investigations were directed both to establishing the present
status of the law governing trade-unions and industrial disputes and
to ascertaining the practical effects of certain classes of laws and
court decisions. The results of the investigations are largely em-
bodied in the reports of Mr. J. Wallace Bryan, of the Maryland bar,
and Mr. Edwin E. Witte.
Because of the necessity for exactness in dealing with questions
which are so involved and which have to so large an extent been
clouded by contradictory court decisions, it is impossible to present a
satisfactory summary of the conclusions which have been reached
upon this subject. It may, however, be said that in substance the
situation revealed by these investigations is as follows :
1. The greatest uncertainty exists regarding the legal status of
almost every act which may be done in connection with an industrial
dispute. In fact, it may be said that it depends almost entirely upon
the personal opinion and social ideas of the court in whose jurisdic-
tion the acts may occur.
2. The general effect of the decisions of American courts, however,
has been to restrict the activities of labor organizations and deprive
them of their most effective weapons, namely, the boycott and the
power of picketing, while, on the other hand, the weapons of em-
ployers, namely, the power of arbitrary discharge, of blacklisting, and
of bringing in strike breakers, have been maintained, and legislative
attempts to restrict the employers' powers have generally been de-
clared unconstitutional by the courts. Furthermore, an additional
weapon has been placed in the hands of the employers by many
courts in the form of sweeping injunctions, which render punishable
acts which would otherwise be legal, and also- result in effect in de-
priving the workers of the right to jury trial.
3. Important steps have been taken to deal with this situation by
the enactment of the Clayton Act, applying to the Federal jurisdic-
tion, and by the passage of laws in Massachusetts and New York
which define the rights of parties engaged in industrial disputes.
The actual effect of the Clayton Act can not be ascertained until it
has been tested in the courts, but eminent legal authorities have
expressed grave doubts that it will accomplish the desired results.
At any rate, it does not seem to remove the root of the existing
injustice, and, furthermore, in all the States except New York and
Massachusetts the grave and uncertain situation already described
exists. This situation must be corrected.
4. There are, apparently, only two lines of action possible: First,
to restrict the rights and powers of the employers to correspond in
substance to the powers and rights now allowed to trade.-unions, and
second, to remove all restrictions which now prevent the freedom of
action of both parties to industrial disputes, retaining only the ordi-
nary civil and criminal restraints for the preservation of life, prop-
erty, and the public peace. The first method has been tried re-
peatedly and has failed absolutely, not only because of the interven-
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 91
1
tion of the courts but because the very nature of the acts complained
of on the part of employers (blacklisting and arbitrary discharge)
makes it impossible to prevent them effectively by any form of legis-
lation or administration. The only method, therefore, seems to be
the removal of all restrictions upon both parties, thus legalizing the
strike, the lockout, the boycott, the blacklist, the bringing in of
strike breakers, and peaceful picketing. This has been most suc-
cessfully accomplished by the British trades disputes act, which is
the result of 50 years of legal evolution, and in its present form
seems to work as successfully as could possibly be expected.
It is suggested, therefore, that the commission "recommend :
1. The enactment by Congress and the States of legislation em-
bodying the principles contained in the British trades disputes act,
the text of which is as follows r
An agreement or combination of two or more persons to do or pro-
cure to be done any act in contemplation or furtherance of a trade
dispute between employers and workmen shall not be indictable as a
conspiracy if such an act committed by one person wrould not be
punishable as a crime. An act done in pursuance of an agreement
or combination by two or more persons shall, if done in contempla-
tion or furtherance of a trade dispute, not be actionable unless the
act, if done without any such agreement or combination, would be
actionable.
An action against a trade-union, whether of workmen or masters,
or against any members or officials thereof on behalf of themselves
and all other members of the trade-union in respect of any tortious
act alleged to have been committed by or on behalf of the trade-
union, shall not be entertained by any court.
An act done by a person in contemplation or furtherance of a
trade dispute shall not be actionable on the ground only that it
induces some other person to break a contract of employment or
that it is an interference with the trade, business, or employment of
some other person, or with the right of some other person to dispose
of his capital or his labor as he wills.
It shall be lawful for one or more persons, acting either on their
own behalf or on behalf of a trade-union, or of an individual em-
ployer or firm in contemplation or furtherance of a trade dispute to
attend at or near a house or place where a person resides or works
or carries on business or happens to be, if they so attend merely for
the purpose of peacefully obtaining or communicating information,
or of peacefully persuading any person to work or abstain from
working.
Every person who, with a view to compel any other person to
abstain from doing or to dp any act which such other person has a
legal right to do or abstain from doing, wrongfully and without
"egal authority —
1. Uses violence to or intimidates such other person or his wife or
children, or injures his property; or
2. Persistently follows such other person about from place to
place; or
3. Hides any tools, clothes, or other property owned or used by
the other person, or deprives him of or hinders him in the use there-
of; or
92 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
4. Watches or besets the house or other place where such other
person resides or works or carries on business or happens to be,
or the approach to such a house or place : or
5. Follows such other person with twjo or more other persons in a
disorderly manner in or through any street or road, shall on con-
viction thereof by a court of summary jurisdiction, or an indictment
as hereinafter mentioned, be liable either to pay a penalty not ex-
ceeding £20, or to be imprisoned for a term not exceeding three
months, with or without hard labor.
IX. THE POLICING OF INDUSTRY.
The commission has made extensive investigations and has heard
many witnesses upon this subject, and as a result the following con-
clusions are justified:
1. The problem of policing industry is generally conceived to lie
in the suppression of violence and the protection of life and prop-
erty; but in reality consists in the more fundamental problem of
protecting the rights of employers and employees as well as pre-
serving the peace.
THE ORIGIN OF INDUSTRIAL VIOLENCE.
2. Violence is seldom, if ever, spontaneous, but arises from a con-
viction that fundamental rights are denied and that peaceful methods
of adjustment can not be used. The sole exception seems to lie in the
situation where, intoxicated with power, the stronger party to the
dispute relies 'upon force to suppress the wreaker.
3. The arbitrary suppression of violence by force produces only
resentment, which will rekindle into greater violence when oppor-
tunity offers. Violence can be prevented only by removing the causes
of violence; industrial peace can rest only upon industrial justice.
4. The origin of violence in connection with industrial disputes
can usually be traced to the conditions prevailing in the particular
industry in times of peace or to arbitrary action on the part of
governmental officials w^hich infringes on what are conceived to be
fundamental rights. Violence and disorder during actual outbreaks
usually result from oppressive conditions that have obtained in a
particular shop or factory or in a particular industry. Throughout
history where a people or a group have been arbitrarily denied rights
which they conceived to be theirs, reaction has been inevitable. Vio-
lence is a natural form of protest against injustice.
5. Violence in industrial disputes is not immediately the product
of industrial conditions, but of the attitude of the parties to the dis-
pute after grievances or demands have been presented. The prin-
cipal sources of an attitude leading to violence are :
(a) Arrogance on the part of the stronger party. This may
result immediately in violence through the use of force for the sup-
pression of the weaker party. The force used may be physical or
industrial. Physical force may be and is used by both employers
and employees, through intimidation, assaults, or attacks on prop-
erty. Such physical aggression is seldom used by employees, as they
are strategically the weaker party and the results are negative ; only
EEPOET OF COMMISSION ON INDUSTRIAL EELATIONS. 93
under exceptional circumstances can an employer be coerced by the
use of force or intimidation. The exceptions seem to lie in the use
of secret means, such as dynamite, with the object of weakening the
employer's resistance.
The use of force by workers is normally directed not against the
person or property of the employer, but against strike breakers and
guards. Many instances of the use of physical force by the agents
of employers have, however, come before the commission, indicating
a relatively wide use, particularly in isolated communities." Such
acts of violence usually take the form of assaults upon the leaders
of the workers or upon organizers.
The instruments of industrial force belong chiefly to the employer,
because of his control of the job of the worker. Their use is more
common and more effective than any other form of violence at the
command of the employer. The most powerful weapon is the power
of discharge, which may be used indiscriminately upon mere sus-
picion, which under certain conditions may be almost as potent,
either in use or threat, as the power of life and death. It is the
avowed policy of many employers to discharge any man who gives
any sign of dissatisfaction on the theory that he may become a
trouble maker or agitator.
The only corresponding weapon in the hands of the workers is
sabotage, in the form either of malicious destruction of property or
of interference with production. The field of its use is much more
restricted in practice than in theory, and its results at best are nega-
tive and produce in the employer only a blind resentment and un-
discriminating hate. Sabotage as a policy shows no signs of devel-
oping in American industry.
(&) Equally productive of an attitude leading to violence is the
denial of the use of peaceful methods of adjusting grievances, or the
creation of a situation in which their use becomes impossible.
On the part of the employer the arbitrary acts which may be
classed under this general head are : Denial of the right to organize ;
refusal to consider the complaints of workers; refusal to meet the
authorized representatives of workers.
Under modern industrial conditions any one of these acts makes
peaceful negotiation and settlement impossible. Without organiza-
tion of the workers their collective claims can not be considered;
without the right to appoint such representatives as they choose,
workers are at the mercy of the employer's power of discharge, and
are usually unequal to the task of presenting and arguing their
claims ; while the refusal to consider grievances leaves only the alter-
native of the strike.
On the part of the workers, the possibility of peaceful settlement
may be destroyed by refusal to discuss claims, by internal dissensions
which render collective and definite action looking to a settlement im-
possible, and by the issuance of ultimata which allow no time for con-
sideration and negotiaton. In any one of these situations the em-
ployer has only the choice between tame submission or absolute re-
sistance to the demands of the workers.
(c) The immediate cause of violence in connection with industrial
disputes is almost without exception the attempt to introduce strike
breakers to take the place of the workers who have struck or who are
94 REPORT OF COMMISSION OIST INDUSTRIAL RELATIONS.
locked out. The entire problem of policing industrial disputes grows
out of the problem of the strike breaker and the attitude of the
State toward him.
All experience shows that if no attempt is made to operate the
plant, violence and disturbances requiring the police are practically
unknown, whereas the attempt of strike breakers to reach the plant,
particularly where strikers are enjoined or prevented from using
reasonable means to inform them of the existence of the strike and
to use persuasive methods to keep them from entering the plant, is
invariably accompanied by disorder and sometimes by active violence.
The existing attitude of the courts and of governmental officials
generally is that the entire machinery of the State should be put be-
hind the strike breaker. This attitude is based upon the theory that
two important rights are involved — first, "the right of the strike
breaker to work," and, second, " the right of the employer to do
business.'' During earlier years, the right of the strike breaker was
stressed by the courts, but since the decision of Vice Chancellor
Stevenson in 1902 (Jersey City Ptg. Co. v. Cassidy, 53 Atl., 230), in
which the doctrine was announced as " recently recognized," the
right of the employer to do business has been in favor apparently
because of its wider application and the fact that being denominated
a property right, injunctions could regularly be issued for its protec-
tion. Regardless, however, of their origin, both of these so-called
rights seem to have been based upon misconceptions by the courts.
The " right to work " guaranteed to the strike breaker seems to be
based upon the conception that the strike breaker is normally a work-
ingman, who seeks work and desires to take the place of the striker.
The fact is, practically without exception, either that the strike
breaker is not a genuine workingman but is a professional who merely
fills the place of the worker and is unable or unwilling to do steady
work, or, if he is a bona fide workingman, that he is ignorant of con-
ditions or compelled to work under duress. The nonworking char-
acter of the strike breaker is shown by the fact that very few are
ever retained as workers after the termination of a strike, while the
attitude of genuine workingmen toward strike breaking is shown by
the significant fact that in the bids of employment agencies and
detective agencies to furnish strike breakers it is provided that
guards will be furnished with each car " to prevent escape in transit,"
and by the fact that when men are candidly informed in the public
employment offices of the existence of a strike, workers practically
never apply for such positions, even though they may be in dire
want.
The second misconception is contained in the idea that the " right
to do business " is an absolute right. Besides the fact that it has only
been insisted upon by the courts within the past 20 years and has no
express legislative or constitutional sanction whatever, this right is
subject to the most severe limitation and infringement even without
due process of law. Not only can the legislature limit the right to
do business in almost every conceivable way, but health authorities
are given power to suspend it entirely if the public safety demands,
as in the case of either a human or an animal epidemic. Further-
more, the courts can not and will not guarantee in any way the " good
will" which is supposed to be the property aspect of the right to
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 95
do business, nor will they assess damages on account of any alleged
injury based upon the " probable expectancy " of the business.
The right to do business is in fact permitted only so far as its ex-
ercise is in the public interest, and it may be restricted or prohibited
through the police power whenever it is dangerous or in any way
deleterious to the public. This is the reason underlying not only
quarantine but every form of regulation and prohibition.
The plea of the workers for the assumption of a new attitude in
relation to strike breakers is, however, based not only upon the nega-
tive character of the rights of the employer and the strike breaker,
but upon a positive though somewhat undefinable demand for recog-
nition that strikers have a right to the jobs which they have left until
their grievances are in some way adjusted. The argument is not
only that when workers are willing to strike and sacrifice their liveli-
hood, the conditions against which they protest must be assumed
to be socially injurious, but, even more, that the worker who has
struck in support of his demand for better conditions has not aban-
doned his job, but, in fact, has a keener interest in it than when
quietly submitting to distasteful conditions.
At the very basis of the workers' contentions, however, lies the
realization that working conditions can be improved only by strikes
and that no strike can be won if the employer can operate his plant
without difficulty. This is becoming increasingly true with every
step in the Nation's industrial development. During more primi-
tive periods, if workers struck their places could not be filled except
through the existence of a surplus of qualified labor in the commu-
nity or by enticing workers from other employers. Now, the devel-
opment of transportation, the establishment of specialized agencies
for supplying strikebreakers, and the growth of large corporations,
which can shift employees from one plant to another, have given
each employer a command of the labor market of the entire country.
There are agencies in every large city which will contract to supply
any kind of labor on short notice, while almost any of the large in-
dustrial corporations can either supply the normal demand with one-
half or three-quarters of their plants, or recruit from the surplus
labor around their various plants a skeleton organization which can
resume operations in a short time.
The respective rights of employer, striker, and strikebreaker are
matters which can not be solved by any method of cold reasoning,
and should not be solved except by the force of public opinion acting
either directly or through the medium of their representatives. In
such matters we feel that our action can extend no further than the
analysis of the issues, the presentation of the pertinent facts, and the
expression of such general opinions as we may have reached.
We are convinced, however, that a modification of the legislative
and judicial attitude on this question is necessary, and also that in
the minds of the public a more general appreciation of the conten-
tions of the workers is already taking place.
A general exception to this may perhaps exist in the case of public
utilities, including not only the services which are commonly in-
cluded, but the supply of milk, ice, and other similar necessities.
The absolute dependence of the population of modern cities upon
the noninterruption of such services has created a widespread public
96 BEPOBT OF COMMISSION OX INDUSTRIAL RELATIONS.
demand for action which will insure them under all conditions. The
public may good-humoredly walk during a street-car strike, but the
interruption of the supply of food, fuel, and ice produces an atti-
tude of public desperation. We confess that, under present condi-
tions, no absolute insurance against its interruption by industrial
disputes seems practicable. As long, certainly, as these services
are performed by private corporations, the right of employees to
strike should not and can not constitutionally be abrogated or
abridged. Even under Government ownership and operation the
problem is only slightly altered by the removal of the incentive of
private profit for the maintenance of improper labor conditions,
while cooperative operation is too vague even for analysis. At pres-
ent proper action seems to consist in providing, first, for the most
effective possible means for conciliation, investigation, and arbitra-
tion ; second, for the use of ail the leverage of public opinion to pro-
mote reasonableness on the part of those involved in the dispute;
and, finally, for the plan as outlined elsewhere for defining clearly
the rights of the parties to the dispute and the impartial but firm
enforcement of such rights.
(d) The greatest disorders and most acute outbreaks of violence
in connection with industrial disputes arise from the violation of
what are considered to be fundamental rights, and from the perver-
sion or subversion of governmental institutions.
This -source of acute unrest has been discussed at length in. a pre-
ceding section, so that at this point it is necessary only to summarize
briefly its commonest manifestations, and to state that even the lim-
ited investigations which the commission has been able to make show
that practically every industrial State has at some relatively recent
time permitted its institutions to be used by one party or the other
to an industrial dispute (almost without exception the employers) in
such a way that the rights of the other party were either nullified or
seriously transgressed.
It may be said that every governmental institution and function
has been at some time utilized by the stronger industrial factor for
the oppression and suppression of the weaker, but those which are
most commonly utilized are, first, the police, including not only the
municipal police, the sheriffs and deputies, the State police and con-
stabulary, and the militia, but the private guards, detectives, and
vigilante organizations, which usurp and exercise the functions of the
police. The biased action of the State and municipal police seldom
extends beyond the making of unwarranted arrests, the enforcement
of unreasonable rules regarding such matters as picketing and public
assemblage, and the use of excessive brutality. The State and
municipal police are uniformly paid by the public and such control
over their action as exists is generally indirect. In the case of the
other bodies mentioned the control is frequently direct and their
action frankly and bitterly partisan. The sheriffs in many counties
deputize guards in the employment and pay of corporations, without
any qualifications and sometimes even without knowing their names.
Similarly the militia are at times recruited from the guards and other
employees of corporations. The private guards, detectives, and vigi-
lantes are openly partisan and can have no other purpose in con-
nection with a strike than to break it with such means as they can
command.
REPORT OF COMMISSION ON IlNDUSTRIAL RELATIONS. 97
The police would, however, be much less effective if their control
in a given locality did not usually imply also control of all or part
of the local courts to give a legal sanction to lawlessness, to protect
these who are criminally liable, and to exercise their full rigor in
the prosecution of the strikers. Such controlled courts have not only
found it possible through the use of blanket injunctions to make
illegal acts which would otherwise be legal, but, resting upon their
protection, the police, the deputies, the militia, and the private
guards have in many cases felt free to go to unbelievable lengths in
order to carry out their plans.
The subserviency of the courts in many parts of the country can
not be more clearly shown than by the fact that they have time and
again permitted the militia, under color of so-called martial law,
to usurp their functions and to defy their associations who resisted
the encroachment. The situation is accentuated also by the fact that
the decisions of such corrupt and subservient courts become the basis
upon which later honest "record worshipping" judges form their
own opinions.1
When governmental institutions are thus corrupted and used as in-
struments of oppression men can only resist with such power as they
have, not alone for the protection of themselves and their families
but for the preservation of the fundamental rights of themselves
and their fellow citizens. Resistance to the usurpers of governmental
power and to those who pervert to base uses the official power with
which they are clothed was made the keystone of the American
Nation, and Abraham Lincoln, on a most solemn occasion, said:
If by the mere force of numbers a majority should deprive a minority of any
clearly written constitutional right, it might, in a moral point of view, justify
revolution — certainly would if such a right were a vital one.2
The grave danger in the United States is that on account of the
enormous area and the sense of isolation of each section as regards
the others, the encroachment upon fundamental rights and 'the sub-
version of local governments will be permitted to gain ground with-
out the effective protest of the entire Nation until the liberties of all
itizens are hanging in the balance.
STATE CONSTABULARY.
6. The commission devoted a great deal of attention to the ques-
tion of a State constabulary as a method of policing industry. Ex-
tensive investigations of the "organization, personnel, and activities
of the, Pennsylvania State Constabulary were made and a number of
witnesses were heard at length. The findings with regard to this
particular police organization may be briefly stated: It is an ex-
tremely efficient force for crushing strikes, but it is not successful in
preventing violence in connection with strikes, in maintaining the
legal and civil rights of the parties to the dispute, nor in protecting
the public. On the contrary, violence seems to increase rather tham
diminish when the constabulary is brought into an industrial dis-
1 See report of B. F. Moore : Application of Writ of Habeas Corpus in Labor and
fonlabor Cases.
2 Inaugural address, Mar. 4, 18G1.
38810°— 16 7
98 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
pute; the legal and civil rights of the workers have on numerous
occasions been violated by the constabulary ; and citizens not in any
way connected with the dispute and innocent of any interference with
the constabulary have been brutally treated, and in one case shot
down by members of the constabulary, who have escaped punishment
for their acts. Organized upon a strictly military basis, it appears
to assume in taking the field in connection with a strike that the
strikers are its enemies and the enemies of the State, and that a cam-
paign should be waged against them as such.
There are certain features of the State police system, however,
which seem to be preferable to the present haphazard methods of
policing strikes. It is desirable, first, that all kinds of police should
receive their entire compensation from the State; second, an or-
ganized force, whose records are known, is preferable both to the
private police of corporations and to the deputies ordinarily sworn in
by sheriffs ; third, it is desirable that the force should be strictly dis-
ciplined and subject to definite orders; fourth, it is desirable that
those in command of any police force should have a reasonable secure
tenure of office and should have had previous experience under similar
circumstances, as an inexperienced person is likely to become panic
stricken by the mere presence of crowds, regardless of their actions.
If these desirable features could be combined with other features
which would insure their impartiality during industrial disputes, and
raise their ideals from the present militaristic basis to the police
basis of preserving the peace and protecting the rights of both parties
and the public, the establishment of State police systems for use in
connection with industrial disputes might be recommended. But
under present conditions, it seems desirable rather to leave the State
policing of industrial disputes to the sheriffs and the militia if the
restrictions hereinafter suggested are rigidly enforced so as to pro-
tect both the organization and the personnel from partisanship.
FREE SPEECH.
7. One of the greatest sources of social unrest and bitterness has
been the attitude of the police toward public speaking. On numer-
ous occasions in every part of the country the police of cities and
towns have, either arbitrarily or under the -cloak of a traffic ordi-
nance, interfered with or prohibited public speaking, both in the
open and in halls, by persons connected with organizations of which
the police or those from whom they receive their orders did not ap-
prove. In many instances such interference has been carried out
with a degree or brutality which would be incredible if it were not
vouched for by reliable witnesses. Bloody riots frequently have
accompanied such interference, and large numbers of persons have
been arrested for acts of which they w^ere innocent or which were
committed under the extreme provocation of brutal treatment of
police or private citizens.
In some cases this suppression of free speech seems to have been
the result of sheer brutality and wanton mischief, but in the majority
of cases it undoubtedly is the result of a belief by the police or their
superiors that they were " supporting and defending the Govern-
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 99
ment" by such an invasion of personal rights. There could be no
greater error. Such action strikes at the very foundation of govern-
ment. It is axiomatic that a government which can be maintained
only by the suppression of criticism should not be maintained. Fur-
thermore, it is the lesson of history that attempts to suppress ideas
result only in their more rapid propagation.
• Not only should every barrier to the freedom of speech be removed,
as long as it is kept within the bounds of decency and as long as the
penalties for libel can be invoked, but every reasonable opportunity
should be afforded for the expression of ideas and the public criti-
cism of social institutions. The experience of Police Commissioner
Woods, of New York City, as contained in his testimony before this
commission, is convincing evidence of the good results which follow
such a policy. Mr. Woods testified that when he became commis-
sioner of police he found in force a policy of rigid suppression of
radical street meetings, with the result that riots were frequent and
bitter hatred of the police was widespread. He adopted a policy of
not only permitting public meetings at all places where traffic and
the public convenience would not be interfered with, but instructing
the police to protect speakers from molestation ; as a result, the riot-
ing entirely ceased, the street meetings became more orderly, and the
speakers were more restrained in their utterances.
It is suggested that the commission recommend as measures de-
signed not only to remove the causes which lead to violence but to
promote the impartial and effective action of police during disputes :
1. The enactment by ' Congress of a statute prohibiting, under
severe penalties, the transportation of men from State to State, either
under arms or for the purpose of arming them, as guards or as agents
either of employers or of employees.
2. The enactment by Congress of a statute prohibiting the ship-
ment in interstate commerce of cannon, gatling guns, and other guns
of similar character, which are not capable of personal use, when
consigned to anyone except military agencies of the State or Federal
Governments.
3. The regulation or prohibition of private detective agencies and
private employment agencies as hereinbefore suggested.
4. The strict enforcement in all public and private employment
offices of the rules requiring full notice of the existence of a strike.
5. The complete assumption by the States and municipalities of the
responsibility for policing, and the prohibition of the maintenance
of any private police (except a limited number of watchmen without
police power except on premises).
6. The definition by statute, by the States, of the conditions under
k which sheriffs may deputize, such regulations to include provisions
that a deputy must be a bona fide resident of the State, that a sworn
statement of the complete activities of each deputy covering a period
of 10 years immediately preceding his deputization shall be filed with
I the secretary of state, that no person who shall have been convicted of
any misdemeanor or who shall have been imprisoned in any State
shall be deputized, and that no deputy shall receive any money or any
other thing of value from any person connected with an industrial
dispute during his period of service or in connection therewith.
100 EEPOET OF COMMISSION ON INDUSTRIAL RELATIONS.
7. The enactment of statutes, by the States, providing a uniform
code governing the militia and embodying the following principles :
(a) A proclamation of martial law or a state of war, insurrec-
tion, or rebellion, by the governor of a State, as the result of an in-
dustrial dispute, shall have no effect upon the continuance of consti-
tutional guaranties of the State and Federal Constitutions, nor upon
the law and statutes, nor upon the jurisdiction of the courts, nor upon
other civil authorities.
(6) The writ of habeas corpus or other process of the courts can
not be suspended, interfered with, nor disregarded by the military.
It is part of the duty of the military to assist in enforcing the process
and decrees of the civil courts.
(c) The ordinary courts shall have exclusive jurisdiction for the
punishment of crime, and in all cases where the same act constitutes
an indictable offense under both military and criminal law, court-
martials shall have no jurisdiction nor authority to try officers or
soldiers accused thereof, but the offender shall be turned over to the
civil magistrate for trial.
(d) The military may not hold, detain, nor imprison persons
arrested by them any longer than is necessary to hand them over to
the civil authorities. No person arrested by the militia shall be de-
tained after noon of the following day without being brought before
a committing magistrate.
(e) The military may not forcibly enter nor search a private house
in order to -seize arms or other property concealed therein without
a search warrant.
(/) The military shall have no authority to establish a censorship
over the press nor to interfere with the publication of newspapers,
pamphlets, handbills, or the exercise of the right of free speech,
except under process of the courts.
(g) The military shall not limit, restrict, nor interfere with the
freedom of movement of peaceable citizens or the rights of public
meeting, assemblage, or parades in streets and public highways or
elsewhere, except under due process of law.
(Ji) Every military officer under whose orders a civilian is ar-
rested shall within 24 hours thereafter report in writing to the com-
manding officer the name of the prisoner, the offense with which he is
charged, and what disposition has been made of him. Failing, he
shall be liable to such punishment as a court-martial may direct.
(i) In times of industrial disputes no private guards, detectives,
nor employees of either of the contending parties shall be enlisted
or employed as members of the militia, and* all persons found by the
commanding officer to be in the employment of either party to a
dispute or actuated by animosity or personal ill will toward either of
the contending parties shall be forthwith released from active service.
(j) The governor may, in times of disturbance, by proclamation
forbid the sale or transportation of firearms, ammunition, and in-
toxicating liquors, and may require all firearms and other weapons
to be deposited with the military at certain places, receipts being
given therefor. Proper search warrants may be issued to discover
concealed weapons.
8. That the States and municipalities should provide by law for
the fullest use of schools and other public buildings for public meet-
ings and lectures and for other similar purposes.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 101
X. THE CONDITIONS AND PROBLEMS OF MIGRATORY LABORERS.
It has been found as a result of the commission's investigations,
which were made chiefly by Mr. P. A. Speek :
1. There are large numbers of American workers, in all prob-
ability several millions, who are not definitely attached either to any
particular locality or to any line of industry. These migratory work-
ers are continually moving from one part of the country to another
as opportunity for employment is presented.
The great movements of these workers are seasonal in character,
as, for example, the movement of harvest hands during the summer
and autumn, the movement to the lumber and ice camps in the
winter, and the movement to the construction camps in the spring
and summer. In addition there are large, irregular movements of
laborers W7hich are produced by the depression in different trades
and localities, and movements due to false rumors about opportuni-
ties and to the men's acquired habits of migration.
2. The number of these migratory workers seems to be increasing
not only absolutely but relatively. 'There are no available figures to
show this conclusively, but it is the general opinion of students of
the subject and of the migratory workers themselves that a rapid in-
crease in their number is taking place.
3. A considerable proportion of these migratory workers are,
unquestionably^ led to adopt this kind of a life by reason of per-
sonal characteristics or weaknesses, and these personal weaknesses
are accentuated rather than diminished by the conditions under
which they live and work. Nevertheless, even if the migratory
workers wrere all men of the highest character and reliability, there
would still be a demand from our industries for the movement of
the population in almost as great numbers as at present, in order
to supply seasonal demands and to take care of the fluctuations of
business.
4. An increasingly large number of laborers go downward instead
cf upward. Young men, full of ambition and high hopes for the
future, start their life as workers, but meeting failure after failure in
establishing themselves in some trade or calling, their ambitions and
hopes go to pieces, and they gradually sink into the ranks of migra-
tory and casual workers. Continuing their existence in these ranks,
they begin to lose self-respect and become "hoboes." Afterwards,
acquiring certain negative habits, as those of drinking and begging,
and losing all self-control, self-respect, and desire to work, they be-
come " down-and-outs " — tramps, bums, vagabonds, gamblers, pick-
pockets, yeggmeu, and other petty criminals — in short, public para-
sites, the number of whom seems to be growing faster than the gen-
eral population.
5. The movement of these migratory workers, at the present time,
is practically unorganized and unregulated. Workmen in large num-
bers go long distances in the hope of finding employment on the basis
of a mere rumor, and frequently find that there is' either no work or
work for only a few. At the same time the demand for labor in a
f~:ven locality or industry remains unfilled, because the workers have
iled to hear of the opportunity. In fact, a large part of the move-
ent of migratory workers at present is determined not by the de-
ands of industry for labor, but by the necessity to search for work.
vs
i
102 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
To illustrate: A man finds himself out of work in a given locality
because of the termination of the busy season, because of business
depression, or because of his personal discharge; he is unable to se-
cure employment in the locality, and he has no information regard-
ing opportunity for work elsewhere. If he remains in the locality-
he is almost certain to be arrested as a vagrant. His only recourse
is to start moving, and the direction of the movement is usually de-
termined by chance.
6. The attempts to regulate the movements of migratory workers
by local organizations have, without exception, proved failures.
This must necessarily be true no matter how well planned or well
managed such local organizations may be.
7. The problem can not be handled except on a national scale and
by methods and machinery which are proportioned to the enormous
size and complexity of the problem.
The basic industries of the county, including agriculture and
railroad construction work, are absolutely dependent upon these
migratory workers.
8. The conditions under which migratory workers live, both in the
cities and at their places of employment, are such as to inevitably
weaken their character and physique, to make them carriers of dis-
ease, and to create in them a habit of unsteadiness and migration.
The provisions for housing and feeding workers in the labor
camps are subject to severe criticism, while the lodging houses in
the large cities are even worse, especially from the viewpoint of
morals. One season spent in a city lodging house is generally suffi-
cient to weaken the physique and destroy the moral fiber of even
the strongest man. Numerous instances of the spread of dangerous
diseases by migratory workers also have been brought to the notice
of the commission.
9. The available information indicates clearly that even the most
perfect distribution of workers, in accordance with the opportunities
afforded at present by American industries, will still leave enormous
numbers unemployed during certain seasons of the year and during
periods of industrial depression.
10. The congregation of large numbers of migratory workers in
large cities during the winter should be avoided, if possible, not only
because they are an unjust burden upon the cities but because of the
degenerating effects of city life during long periods of idleness.
11. The movement of migratory and seasonal workers is caused
chiefly by the seasonal demand of industries and by the men's search
for work, and, to a degree, by their aimless desire to move about.
The conditions of their transportation have become grave. Millions
of men annually have to, and are allowed to, resort to such a method
of movement as stealing rides on the railways. This method of
transportation results in the demoralization and casualization of
workers, in their congestion in industrial and railway centers, in
waste of their time and energy, in frequent bodily injuries and
numerous fatal accidents and homicides annually, while, at the same
time, it serves but poorly the industrial demand for help.
12. When the workers return to the city, from labor camps, for
instance, either to rest or to spend the time between seasons, they not
only meet the unhealthy and demoralizing influence of cheap lodging
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 103
houses, saloons, houses of prostitution, and other similar establish-
ments in the slums, but they fall easy prey to gamblers, small private
bankers, and all sorts of parasites. As a result, what earnings they
have left after deduction of their living expenses at work places
rapidly disappear, no matter how large these earnings may be.
The principal recommendations for dealing with the problem of
migratory workers are outlined under the head of unemployment.
In this immediate connection, however, it seems desirable to suggest
three necessary measures:
1. The Interstate Commerce Commission should be directed by
Congress to investigate and report the most feasible plan of pro-
viding for the transportation of workers at the lowest reasonable
rates and, at the same time, measures necessary to eliminate the
stealing of rides on railways.
If special transportation rates for workers are provided, tickets
may be issued only to those who secure employment through public
employment exchanges.
2. The establishment by States, municipalities and, through the
Department of Labor, the Federal Government, of sanitary work-
ingmen's hotels in which the prices for accommodation shall be ad-
justed to the cost of operation. If such workingmen's hotels are
established, the Post Office Department should establish branch
postal savings banks in connection therewith.
3. The establishment by the municipal, State, and Federal Gov-
ernments of colonies or farms for " down and outs," in order to
rehabilitate them by means of proper food, regular habits of living,
and regular work that will train them for lives of usefulness. Such
colonies should provide for hospital treatment of cases which re-
quire it.
XI. UNEMPLOYMENT.
The extent and character of unemployment has been briefly pre-
sented in a previous section, but the discussion there dealt only
with the larger aspects of the situation in general terms. It re-
mains to present at this point, in summary fashion, the ^ findings
which have resulted from the extensive investigations which have
been conducted for the commission, principally under the direction
of Dr. William M. Leiserson, together with certain specific recom-
mendations relating to the organization of the labor market and the
regularization of employment.
EXTENT AND CHARACTER OF UNEMPLOYMENT.
1. Wage earners in the principal manufacturing and mining in-
dustries in the United States lose on the average from one-fifth to
one-fourth of the working time during the normal year.
This is the conclusion indicated by an examination of practically
all of the published material, and of the hearings of the commission,
relating to loss of time, irregularity of employment, and unem-
ployment.
2. Excluding the extremely seasonal industries, such as canning,
harvesting, lumber cutting and logging, which operate normally
only a part of the year, the amount of lost working time varies
104 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
greatly for workers in different industries and in different occu-
pations and trades. Loss of time appears to be greatest in bitumin-
ous coal mining, iron and steel manufacturing, leather, woolen and
worsted clothing, slaughtering and meat packing, and in other in-
dustries where the proportion of unskilled labor is large.
3. It has been found that the lowest-paid worker is subject to the
greatest loss in working time, not simply because he is unskilled but
also because he is poorly nourished and weakened by the effects of
unfavorable conditions of living and, in many instances, by unbear-
ably severe conditions of work.
The tendency in the evolution of modern industry toward the em-
ployment of a larger proportion of unskilled labor, as well as the
fact that many industries have come into existence because of the
availability of a supply of casual laborers and of woman and child
workers who are willing to work for less than subsistence wages,
points to a greater degree of irregularity of employment, unemploy-
ment, and less of working time, than ever before.
4-. The actual number or proportion of workers at any given time
who are unable to work can not be estimated, because of the lack of
adequate data in this country. Recent investigations by Federal
authorities and the statements of competent authorities before the
commission, however, prove beyond doubt that the number of unem-
ployed persons even in normal times is appallingly great. The sta-
tistics of highly organized trades show that even in times of greatest
industrial activity there is a considerable percentage, ranging from,
7 to 15 per cent of all of the members of unions in different trades
and industries, of workers who are unemployed during the year. In
any }rear the unemployed who congregate in the large cities alone
during the winter months number several hundred thousand, while
in years of industrial depression the number of unemployed in the
entire country is at least three million.
5. The loss in working time is of two principal classes: Lack of
work and sickness. Lack of work, which may mean the inability of
the worker to find employment as well as the absence of a demand
for labor of any particular kind or even of all kinds, either in a
locality or section or in the country as a whole, accounts for approxi-
mately two-thirds of the average worker's loss of time at work,
according to the available data on this point ; ill health, according to
several intensive investigations of wage wrorkers and their families
and the examination of the sick records of nearly a million wage
earners in this country, accounts for approximately one-fourth of
the loss in working time. Strikes appear to be the cause of less than
two per cent of the loss in working time, and accidents are the cause
in about the same proportion.
6. In addition to the two basic causes of unemployment — unjust
distribution of income and land monopolization — which were ana-
lyzed in detail in an earlier section of the report, the following
causes demand attention:
(a) Evolutionary changes in industry and in social habits and
movements which affect the character and the extent of the demand
for labor as well as the character and the quantity of the supply of
labor. These include changes in industrial structure and methods —
such as the increase or decrease in the demand for labor in certain
industries and localities, the introduction of machinery and new
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 105
processes, and the changes in the character of the demand for labor —
and changes in the organization of industry. The character and
quantity of the supply of labor have been affected by immigration
and by the entrance into industry of women workers, both of which
factors have caused an increase in the supply of cheap and unskilled
labor. To some extent, however, the labor supply is fluid because
of the ease with which considerable proportions of immigrants can
withdraw from the labor market by returning to their homes in
times of industrial inactivity.
(b) Variations in the demand for labor due to fluctuations and
irregularities in industry. Industrial fluctuations may be classed as
cyclical and seasonal. Cyclical fluctuations result from business de-
pressions and at times double the amount of loss of time during a
year, which is illustrated by the fact that the railroads employed
236,000 fewer men in 1908 than in 1907. Seasonal fluctuations may
either be inappreciable, as in municipal utilities, or may displace
nearly the entire labor force. The seasonal fluctuations in the can-
ning industry in California, for example, involve nearly nine-tenths
of all the workers; in logging camps, which depend upon the snow,
operations are practically suspended in summer; while in the brick
and tile industry only 36.5 per cent of the total number of employees
are retained during the dull season. Irregularities in the conduct of
industry and in the method of employing labor are evident in dock
work, in the unskilled work in iron and steel, and in slaughtering
and meat packing; in the competitive conditions in industries which
force employers to cut labor cost down to the utmost and to close
down in order to save operating expenses; in speculative practices
which result in the piling up of orders and alternate periods of rush
production and inactivity ; in loss of time due to inefficient manage-
ment within plants. In some cases it has been charged although
without definite proof, that irregularity of employment is due to a
deliberate policy of employers in order to lessen the chance of organ-
ized movement, as well as to keep the level of wages down in un-
skilled occupations by continually hiring new individuals,
(c) Conditions determining the worker's ability to grasp or retain
the opportunity to be employed which industry offers. Among these
conditions are ill health, old age, deficiencies in industrial training,
lack of facilities by which the worker and the job can be brought
together, factors causing immobility in the labor supply and its in-
ability to adjust itself to changes in the character of the demand for
labor, and those personal factors, such as dishonesty, laziness, intem-
perance, irregularity, shiftlessness and stupidity, which are com-
monly included under the term " deficiencies of character." By no
means are all of these conditions under the control of the worker;
in fact, the further investigation goes the greater appears the re-
sponsibility which society and the employer bear for the conditions
that determine the worker's ability to retain whatever employment
industry is able to offer regularly.
7. The effects of the loss in working time and the attendant
irregularity of employment may be summed up in the term "the
workers' economic insecurity." Specifically the effects, as shown by
study of the results of various investigations and by testimony
jfore the commission, may be summarized as follows:
106 KEPOET OF COMMISSION ON INDUSTRIAL RELATIONS.
(a) Actual loss of earnings, which in turn results in the necessity
for the supplementing of family income by the earnings of women
and children, and by payments from boarders and lodgers whose
presence is inimical to family life.
(b) The depression of the wage level, in some instances, and the
preventing of higher wages.
(c) Waste in expenditure, due to irregularity of family income.
(d) Deleterious effects upon the worker, such as demoralization,
worry, loss of skill, irregularity of habits, etc.
(e) The gradual loss of economic status by workers who are
thrown out of employment and the inevitable drift of a large propor-
tion into the class ordinarily known as " casual laborers," the con-
stant recruiting of the large army of dependents and delinquents
who compose the unemployables, and the general loss of national
efficiency that so great a number of incapable citizens must entail.
{/) The existence of a supply of casual laborers and irregularly
employed women and children, upon which parasitic industries, un-
able to exist unless they pay wages below the standard of decent
subsistence, are called into being.
EXISTING CONDITIONS OF EMPLOYMENT.
8. In addition to the large variations which affect entire indus-
tries, there is an ever present and equally difficult problem in the
unsteadiness of employment. The existing methods of hiring and
discharging employees, and the constant changing of positions by
th« workers themselves, divide the work among a much larger num-
ber of employees than are actually needed. Instead of one person
being employed where there is work for but one, several are hired
during the course of the year to occupy the same position. Thus an
investigation of the cloak and suit industry of New York showed
that the maximum number of employees in 16 occupations during
any week of the year was 1,952. Actually, however, the pay rolls
showed that 4,000 people were employed in these occupations. This
" turnover " of the labor force, the constant shifting from job to job,
the dropping and hiring of men, is peculiar to no industry. It is
found everywhere, among women as well as men, and it is a kind of
irregularity of employment that is a constant factor. A large mail-
order house which began the year with about 10,500 employees and
ended with about the same number, engaged during that year 8,841
people in order to maintain their force. A manufacturing estab-
lishment employing in 1913 an average of 7,200 people, hired 6,980
during that year. An automobile factory was reported in 1912 to
have hired 21,000 employees in order to maintain an operating force
of 10,000. A large steel plant employing about 15,000 men hires
normally an equal number to maintain that force. During the years
when it wanted to increase the force three and one-half times as many
were hired as were actually needed to make up the increase. In
some lumber camps and sawmills on the Pacific coast all men are
discharged twice a year, in July and December, and complete new
forces are hired when work is resumed. In the logging camps it is
customary to hire five men in the course of the season to keep one
job filled.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 107
A manager of a large electrical works made a study of a group of
representative factories (large, small, and medium) in the mechan-
ical industries and found that to increase their working force by
8,128 people in the year 1912, they actually hired 44,365 people ; that
is to say, five and one-half times the number actually needed to make
up the increase were hired and 36,237 were dropped from the rolls
for one reason or another.
9. Detailed investigations show that a majority of the employees
dropped from the pay rolls leave of their own accord. But there is
no doubt that many of them leave because they were hired to do work
for which they were unfitted; arid many others, without actually
being discharged, leave because work is slack or threatens to become
slack. In the lower paid and more disagreeable jobs there is almost a
constant shifting of employees because no one works at these jobs
except during those periods when he is helpless and can get no other
work. Whatever the reason is for the men quitting, there is no doubt
that conditions of employment and methods of hiring and discharg-
ing employees have very much to do with causing a large " turnover "
of the labor forces. Those employers who have given attention to
this question of hiring and discharge have been able to reduce the
" turnover " very greatly, and thus make employment more steady.
10. The problem of unemployment has never received adequate
attention, apparently because it has been believed generally that it
affected only a small part of the working population. Such a belief
is absolutely false. Not only is practically every wage earner in con-
stant dread of unemployment, but there are few who do not suffer
bitterly many times in their career because they are unable to get
work. Every year from 15,000 to 18,000 business enterprises fail and
turn their employees out; every year new machinery and improved
processes displace thousands ; cold weather and wet weather and hot
weather stop operations and force wage-earners into idleness; and
where there are not these natural causes there are the customs and
habits and holiday rushes which result in overwork followed by
underemployment. Employers change the locations of their plants
and conditions of credit and currency cause depressions and shut-
downs and short-time and part-time work. Constantly the methods
of hiring and discharging employees are causing people to be dropped
from the pay rolls. All these facts in connection with the conserva-
tive figures of fluctuation in the amount of employment prove that
" the unemployed " eventually include practically every wage-earner,
and not alone a surplus portion.
11. Practically all wage-earners are affected by the fluctuations of
industry. To count the number of the unemployed at any given time
becomes almost impossible, since the number is changing from day to
day. The unemployed of to-day are the workers of to-morrow, and
vice versa.
The permanently unemployed are really people who have dropped
out of the ranks of industry, broken down by the unsteadiness of
employment or other causes. Some are mentally defective or physi-
cally incapable or both. Others are " down and outs," who have
lost the habit of working. Still others live by their wits, by begging,
or by crime. During the most prosperous times, when labor is in
great demand, these same people do not work. They are "unem-
108 REPOET OF COMMISSION ON INDUSTRIAL RELATIONS.
ployed" in the same sense that young children, the old, and the sick,
and those who live on incomes from investments, are unemployed.
No amount of work that might be provided by public or private
enterprise would have any appreciable effect on these unemployables.
They need hospital or corrective treatment. In prosperous times
they are considered the subjects of such treatment, but in every
period of industrial depression they stand out as the most conspicuous
element in the " army of the unemployed."
The failure to distinguish these unemployables from those who are
temporarily out of work on account of a slack season or the failure
of a firm and those casual workers who are employed for part of
every week or month, leads to hopeless confusion.
12. The fluctuations in business affect capital as well as labor, but
the result is entirely different. Capital suffers the same fluctuations
and every industry has its "peak loads." The essential differences
are, first, that a fair return on investments is estimated by the year,
while for labor it has become more and more customary to hire and
pay and discharge by the week, day, or hour, or by the piece, and,
second, that wrhile capital can offset the fat years against the lean,
the human beings who are unemployed can not, but must starATe or
suffer a rapid physical and moral deterioration. The result is that
unless the wage earners are very strongly organized — and the vast
majority are not — they must bear the whole burden of the waiting
period when they must act as a reserve force ready to meet the maxi-
mum demand of the busy season. We dp not consider policemen
unemployed when they are not arresting violators of the peace, and
we do not consider firemen out of work when they sit in the fire-
houses prepared to do their duty. But for most working people
industry is still conducted on a sort of volunteer fire department
basis. In the busy seasons and prosperous years all are desirable
and useful citizens. At other times they are useless and worthless,
so far as our industries are concerned. They are turned adrift to
take care of themselves and those dependent on them as best they can.
EXISTING AGENCIES FOR EMPLOYMENT.
13. The first step in any intelligent attempt to deal with the prob-
lem is the organization of the labor market on a systematic business-
like and efficient basis.
14. Labor exchanges can not create work nor make the existing
irregular demand for labor steady the year through, but they can,
if properly managed, remove the unnecessary loss of time which
workers now suffer in passing from one job to the next; they can
eliminate the numberless evils which now characterize private em-
ployment offices ; and they can provide the information and adminis-
trative machinery which is essential to every other step in dealing
with the problem.
15. The absurdity and waste wrhich characterizes the existing sys-
tem of marketing labor can best be appreciated by imagining the
condition which would be produced if every manufacturer who
needed lathes, drill presses, planers, and milling machines advertised
for them in the papers, and many machines were sent to him, out
of which he could pick the few 'he wanted. Yet that is exactly
what happens when machine hands, human beings, are wanted;
a r»
TV J
£
\ 0
:
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 109
when the calls go out for harvest hands or when any other class of
labor is advertised for. No one knows 'how many will answer the
advertisement. Many more than the number needed respond to the
calls. The waste of time, energy, car fare, and railroad fare to get
to the places is enormous. Often men quit positions in the hope of
getting the alluringly advertised work. Many employers do not even
advertise. They simply hang the " Help wanted " sign at the door
and depend on people to walk the streets and watch for these signs.
16. Wherever systematic methods and intelligent organization and
direction are lacking, there evils creep in to add to the chaos. That
is exactly what we find has happened in the labor market. The
saloon becomes one of the most important places in the country to get
information about jobs. Pool rooms, cafes, grocery stores, lodging
houses, even street corners and public parks become improvised
labor markets. In these places many and strange abuses are met
with. Groundless rumors send people scurrying over the city and
the country on a wild-goose chase. One job seeker sells information
to another, and quite often it is false or misleading. Foremen sell
real or bogus jobs under their control. Fees for jobs are paid by
buying drinks, and " man catchers " pick up victims to rob or abuse.
17. Of all the evils, the wild rumors regarding available jobs are
the greatest. These evils are increased by fake " want ads " in the
newspapers, untruthful or innocently misleading advertisements for
help, and new stories intended to boost towns or industries or to
attract large supplies of labor. Investigators and men who were sent
to answer " want ads " found many of these inserted by employment
agents who had no jobs to offer but who wanted to collect registra-
tion fees. Other advertisements were pure fakes, inserted by " white
slavers," bogus real estate and stock brokers, selling agents of " new
propositions," padrones, and other swindlers. A study of newspaper
want advertisements made a few years ago revealed that when times
are good one-fourth or more are " fake ads," while in hard times
more than one-half are in this class,
18. Private enterprise has attempted to deal with the situation
through the establishment of employment agencies which gather
information regarding opportunities for employment and sell the
information to work seekers and, under certain conditions, collect
fees also from employers. The number of private employment agents
varies greatly from year to year, but there must be from 3,000 to
,000 of these labor middlemen in the country.
Investigations show, however, that instead of relieving unemploy-
ent and reducing irregularity, these employment agencies actually
serve to congest the labor market and to increase idleness and irregu-
arity of employment. They are interested primarily in the fees they
n earn, and if they can earn more by bringing workers to an already
vercrowded city, they do so. Again, it is an almost universal custom
mong private employment agents to fill vacancies by putting in them
ople who are working at other places. In this way new vacancies
re created and more fees can be earned.
19. They also fail to meet the problem because they are so numerous
and are necessarily competitive. With few exceptions, there is no
cooperation among them. This difficulty is further emphasized by
he necessity of paying the registration fees required by many
110 REPORT OF COMMISSION OIST INDUSTRIAL RELATIONS.
agencies; obviously the laborer can not apply to very many if he
has to pay a dollar at each one.
20. The fees which private employment offices must charge are
barriers which prevent the proper flow of labor into the channels
where it is needed and are a direct influence in keeping men idle.
In the summer, when employment is plentiful, the fees are as low
as 25 cents, and men are even referred to work free of charge. But
this must necessarily be made up in the winter, when work is scarce.
At such times, when men need work most badly, the private em-
ployment offices put up their fees and keep the unemployed from
going to work until they can pay $2, $3, $5, and even $10 and more
for their jobs. This necessity of paying for the privilege of going
to work, and paying more the more urgently the job is needed, not
only keeps people unnecessarily unemployed, but seems foreign to
the spirit of American freedom and opportunity.
21. An additional injustice inevitably connected with labor
agencies which charge fees is that they must place the entire cost
of the service upon those least able to bear it. Employment agents
say that employers will not pay the fees ; hence they must charge the
employees. Among the wage earners, too, however, those who are
least in need and can wait for work, pay the least for jobs and even
get them free, while those who are most in need make up for all the
rest and pay the highest fees. The weakest and poorest classes of
wage earners are therefore made to pay the largest share for a serv-
ice rendered to employers, to workers, and to the public as well.
22. The fees paid private employment agents in California in the
license year ending March 31, 1912, amounted to $403,000. Using
these figures as a rough basis, the fees for the country as a whole
amount annually to $15,000,000. This enormous sum of money,
which is being paid chiefly out of the meager earnings of domestic
servants, clerks, and unskilled laborers, would be enough to support
a system of public exchanges which would bring order out of the
existing chaos.
23. There are many private employment agents who try to con-
duct their business honestly, but they are the exception rather than
the rule. The business as a whole reeks with fraud, extortion, and
flagrant abuses of every kind. The most common evils are as fol-
lows:
Fees are often charged out of all proportion to the service ren-
dered. We know of cases where $5, $9, $10, and even $16 apiece
has been paid for jobs at common labor. In one city the fees paid
by scrubwomen is at the rate of $24 a year for their poorly paid
work. Then there is discrimination in the charges made for the
same jobs. Often, too, men are sent a long distance, made to pay
fees and transportation, only to find that no one at that place or-
dered men from the employment agent. A most pernicious prac-
tice is the collusion with foremen or superintendents by which the
employment agent "splits fees" with them. That is, the foreman
agrees to hire men of a certain employment agent on condition that
one- fourth or one-half of every lee collected from men whom he
hires be given to him. This leads the foreman to discharge men
constantly in order to have more men hired through the agent and
more fees collected. It develops the" " three-gang " method so uni-
versally complained of by railroad and construction laborers,
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. Ill
namely, one gang working, another coming to work from the em-
ployment agent, and a third going back to the city.
Finally, there is the most frequent abuse — misrepresentation of
terms and condition of employment. Men are told that they will get
more wages than are actually paid, or that the work will last longer
than it actually will, or that there is a boarding house when there
really is an insanitary camp, or that the cost of transportation will
be paid, when it is to be deducted from the wages. They are not told
of other deductions that will be made from wages; they are not
informed about strikes that may be on at the places to which they
are sent, nor about other important facts which they ought to know.
These misrepresentations, it must be said, are often as much the fault
of the employer as of the labor agent. Also the employer will place
his call for help with several agents, and each will send enough to
fill the whole order, causing many to find no jobs. Labor agents and
laborers alike are guilty of the misuse of free transportation fur-
nished by employers to prospective help. And it is true also that
many applicants perpetrate frauds on the labor agents themselves,
as, for example, causing them to return fees when positions actually
were secured. This is the result of the general feeling that the whole
system of paying fees for jobs is unjust; and if they must pay in
order to get work, then any attempt to get the fee back is justifiable.
24. Attempts to remove these abuses by regulation have been made
in 31 States, but with few exceptions they have proved futile, and at
most they have served only to promote a higher standard of honesty
in the business and have not removed the other abuses which are
inherent in the system. Where the States and cities have spent much
money for inspectors and complaint adjusters there has been con-
siderable improvement in the methods of private employment agen-
cies, but most of the officers in charge of this regulation testify that
the abuses are in " the nature of the business " and never can be
entirely eliminated. They therefore favor the total abolition of
private labor agencies. This is also the common opinion among
working people, and in several States attempts have already been
made to accomplish this by law.
25. It is significant that trade union members are practically never
found among the applicants for charity during periods of unemploy-
ment. They may be unemployed, but they are in some way cared for,
either by having work found for them or by systematic or voluntary
relief. Within each strongly organized trade, it may be said, the
problem of connecting man and job is cared for fairly well. The
union headquarters is the most common labor market for organized
workers. Ordinarily, no systematic employment business is done, but
many unions have out-of-work books in which the unemployed write
their names, and it is part of the duties of the business agent of every
union to be on the lookout for vacancies and to notify members seek-
ing employment of the opportunities. Many unions also have travel-
ing benefits to assist members in going from place to place. But
when it comes to placing men outside of their own trades the unions
are not successful as employment offices.
Partly for this reason and partly for the reason that only a small
part of the wage earners are in strongly organized trades, the trade
unions occupy a minor place in the general labor market.
112 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
26. Within recent years associations of employers have established
employment offices in all the important cities of the country. The
movement is spreading very rapidly, and there is hardly an important
industrial center in the country that has not a bureau of this kind.
These offices are supported out of the funds of the employers' associa-
tions, and their services are free to working people. Most of them,
however, do a very small employment business.
Almost all of these offices owe their origin to the movement among
employers to establish and maintain the so-called " open shop " or
the " antiunion shop." Since their establishment, employers have
discovered that such offices are very useful also in creating central
clearing houses for labor, " constituting the shortest cut between
supply and demand." This, however, is not their primary purpose,
for nowhere have they extended their operations to include common
laborers, who suffer most from disorganization of the labor market.
These bureaus are merely divisions of the regular business of the
employers' associations, and one of the main purposes of these as-
sociations is to prevent the organization of their shops by trade-
unions. The employment bureaus are established and -maintained to
further this purpose.
The empk^ment bureaus maintained by employers' associations,
therefore, not only are of no practical value as a means of solving
the problem of unemployment, but, on the contrary, because they are
organized primarily to prevent the employment of skilled workmen
who are distasteful to their members, are actual barriers to the free
movement of labor.
27. In every city there are religious and charitable organizations
which attempt to find work for destitute persons. In connection
with the charity societies of the larger cities, regular employment
agencies are maintained, but very little business, comparatively, is
done by these officers. Working people do not go to them, and em-
ployers do not call for employees at such offices, except occasionally
for men to do odd jobs, or when they agree to place someone as a
favor to the charity workers. The main work of the charitable em-
ployment offices is to find odd jobs for the unemployed who can not
hold ordinary positions. They also help people handicapped by age,
illness, or other physical or mental defect. Their primary purpose is
charity. They may be said to have no effect whatever on employ-
ment conditions for able-bodied workers.
Until the State is ready and able to take proper care of its handi-
capped, diseased, and subnormal members, the charitable employ-
ment agencies and institutions will continue to be necessary, because
labor exchanges properly organized on a business basis, whether by
public or by private enterprise, can not deal with the handicapped
classes of labor. Those who are physically or mentally unfit to hold
positions should be sent to the places where they will get the relief
they need and not to work which they would quit or from which they
would be dismissed in a few days.
PUBLIC EMPLOYMENT AGENCIES.
28. In 1890 Ohio created the first public employment offices in this
country. Since that time, such offices have been established in 23
other States, and they are now in operation in about 80 cities. Most
I
EEPOET OF COMMISSION ON INDUSTRIAL EELATIONS. 113
of them were created by State laws ; a few are municipal enterprises.
They represent an expense to -the States and cities of about $300,000
annually, and, according to their reports, they fill about 500,000 posi-
tions a year.
29. As a result of a very extensive investigation it has been found
that the public employment offices of the United States, as a whole,
are issuing inaccurate statistics. They are slipshod in recording in-
formation about employers and employees. They cater too much to
casual laborers and " down-and-outs," thus driving away the better
class of workers. Too many are poorly housed, with insufficient
lighting and ventilation. They fail to supplant private agencies or
to lessen their exploitation of workers. They do not exchange in-
formation even when closely located. They fail to bring themselves
to public attention, either by advertising or otherwise, and they have
failed to arouse public interest in their work. This is true of public
employment offices taken as a whole, but there are some very bright
exceptions. During the last few years, also, the labor departments
have been devoting more attention to the work of public employment
offices, and many improvements have resulted which show that the
principles underlying the offices are sound, but that they have not
been properly carried out.
30. The reasons for the failure of most of the public employment
offices are:
First. The inefficiency and lack of training of the officials and
clerks who operate the agencies. A public employment office must
build up its work by soliciting business and giving service that is felt
to be valuable ; otherwise little attention will be paid to it. For this
purpose men of judgment and experience are necessary to carry on
the work. It is a technical business requiring not a mere shuffling of
applications but careful selection of applicants and thorough under-
standing of the requirements of positions to which they are to be sent.
Second. The offices have generally .been regarded as political spoilsf
with a consequent change of personnel after each election.
Third. The salaries have been inadequate to attract competent men.
Fourth. The public employment offices have been the objects of
suspicion, if not of actual opposition, by employers and organized
labor as well. Union men have feared that the offices might be used
as strike-breaking agencies, or to lower wage rates. Employers, on
the other hand, have feared that the offices might be used to fill their
shops with union men and labor agitators.
The activities of the Federal Department of Labor in connection
with unemployment have been chiefly attempts to utilize the exist-
ing machinery of the Bureau of Immigration and the Post Office
Department for receiving the applications of men out of work, col-
lecting information regarding opportunities for employment, and as
far as possible referring idle men to opportunities for work. For this
purpose the country has been divided into 18 zones, with a central
office in each, which is in charge of an immigrant inspector. Appli-
cations from employers and employees are received either directly
or through a special arrangement with the Post Office Department.
The statutory authority for the establishment of the system is
contained in the act of 1907, creating a division of information in
the Bureau of Immigration, broadened in scope by the act creating
38819°— 16 8
114 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
the Department of Labor. The opportunity to establish the system
arose through the great decrease in immigration, which left a large
part of the resources of the Bureau of Immigration available for
this purpose. The system was established only in March, 1915, and
it can not properly be judged on the results of this very limited
experience. The most promising feature of the entire system is the
arrangement which has been made for close cooperation with the
National Farm Labor Exchange, which has been organized by the
labor commissioners of the States in the wheat belt. No such close
cooperation has yet been established with any other public employ-
ment system and no effort has been made to regulate the abuses of
the private exchanges which do business in two or more States.
The following observations regarding the present scheme of the
Department of Labor seem to be proper :
(a) The system of zones and central offices is sound and affords a
suitable framework for the development of the system.
( b ) The operation of the system directly by the Bureau of Immi-
gration is likely to deter a great many workmen from utilizing it,
through a belief that it is intended only for immigrants.
(c) The employers have generally assumed an attitude of suspi-
cion toward the Department of Labor, which forms a great handicap.
(d) The system does not yet provide for sufficiently close coopera-
tion with the State and municipal employment offices.
(e) The system of registering applications does not provide for
the close personal contact which is necessary to ascertain the require-
ments of the employer or to select the workman who is capable of
filling such requirements. The success of every employment office
depends upon this personal contact.
(/) The qualifications demanded in the examination of immigrant
inspectors are not designed to secure men who are properly qualified
to operate public employment offices.
(g) A. national employment .system should not have to depend
upon the exigencies of the general immigration service.
(h) The system can not attain efficiency until provision is made
for the regulation of private agencies which operate in two or more
States.
(*) The successful operation of a national employment system can
not be attained until provision is made for some form of cheap trans-
portation, which will assure the prompt arrival of workers at points
where they are needed and eliminate the present wasteful, dangerous,
and demoralizing practice of workers riding on freight trains.
(j) In order to secure the confidence of both capital and labor, the
creation of national and local advisory committees consisting of
employers and employees is advisable. Such committees would also
be of great assistance through their knowledge of the local industrial
conditions.
It is suggested that the commission recommend :
1. The enactment of appropriate legislation modifying the title
of the Bureau of Immigration to " Bureau of Immigration and
Employment " and providing the statutory authority and appropri-
ations necessary for —
(a) The establishment of a national employment system, under
the Department of Labor, with a staff of well paid and specially
qualified officials in the main offices at least.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 115
(b) The licensing, regulation, and supervision of all private em-
ployment agencies doing an interstate business.
(c) The investigation and preparation of plans for the regulariza-
tion of employment, the decasualization of labor, the utilization of
public work to fill in periods of business depression, insurance against
unemployment in such trades and industries as may seem desirable,
and other measures designed to promote regularity and steadiness of
employment.
2. The immediate creation of a special board made up of the prop-
erly qualified officials from the Departments of Agriculture, Com-
merce, Interior, and Labor and from the Board of Army Engineers
to prepare plans for performing the largest possible amount of
public work during the winter, and to devise a program for the
future for performing during periods of depression such public work
as road building, construction of public buildings, reforestation, irri-
gation, and drainage of swamps. The success attending the construc-
tion of the Panama Canal indicates the enormous national construc-
tion works which might be done to the advantage of the entire
Nation during such periods of depression. Similar boards or com-
missions should be established in the various States and munici-
palities.
XII. ORGANIZATION, METHODS, AND POLICIES OF TRADE UNIONS.
The investigations of the commission conducted under the direc-
tion of Dr. George E. Barnett, are the basis of the following conclu-
sions :
1. The number of trade unionists relative to the working popula-
tion is steadily increasing, although in certain industries, on account
of the opposition of the great corporations and hostile employers'
associations, trade unionism is practically nonexistent. At present
it may be roughly estimated that in manufacturing, mining, trans-
portation, and the building industries, if the proprietary, super-
visory, official, and clerical classes are excluded, 25 per cent of the
workers 21 years of age and over are trade unionists.
2. The effects of trade unionism on wages are undoubted. With-
out some form of combination the wageworkers can not bargain on
equal terms with their employers. During the past 15 years, a period
of rapidly rising prices, wages in well-organized trades have kept
pace with the rising cost of living, in contrast to the relative decline
of the purchasing power of the wages received by labor generally.
3. In the well-organized trades the hours of labor have been stead-
ily reduced until at present eight hours is the normal working day
for at least one-half of American trade unionists. It is significant
of the influence of trade unionism on the length of the working day
that it is exactly in those trades in which the trade unionists are a
relatively small part of the total working force that they work long
hours relatively to other trade unionists.
4. As the unit of industry grows larger and the natural relation
which exists between the small employer and his workmen disap-
pears, the opportunity for unjustifiable discharges and petty tyran*
nies enlarges. The result is distrust and enmity among the employees.
The effective remedy is the organization of the workers and^ the
116 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
establishment of a system of trade boards in which the workers are
equally represented with power to deal with such questions.
5. By means of mutual insurance in case of death, sickness, acci-
dent, old age, and unemployment many trade unions have greatly
improved the conditions of their members. The extension of such
systems appears to be highly desirable.
6. The trade union is a democratic institution and faces the same
problems in securing efficient government that other democratic insti-
tutions face. The theory of government which the American trade
unions have adopted is the centralization of power in the national
trade union as against the local unions. The successful carrying out
of this plan of organization will eliminate the chief defects in trade
union government. The control by the national union over strikes
and the system of mutual insurance is already thoroughly established
in the more important unions; it should be established in all other
unions.
7. Unwarranted sympathetic strikes have undoubtedly been the
cause of great annoyance and considerable economic loss to employers.
The annoyance in such cases is particularly great, because no direct
action by the employer can be taken; at best he can only use his
influence with his associates or competitors. With the increasing
control of the national officers over the local unions, this kind of
strike seems to be decreasing both in extent and frequency. Such
sympathetic action is deep-rooted in the sense of brotherhood which
to a greater or less degree pervades and will not be completely
eliminated until substantial justice exists throughout industry.
8. A few trade unions exclude qualified persons from membership
by high initiation fees or other devices. This policy is condemned
by the more important unions and is prohibited by their rules. The
evidence presented to the commission shows clearly that the policy
of exclusion is antisocial and monopolistic and should be given up by
those unions which practice it.
9. In many trades the efficiency of the union depends upon the
maintenance of the rule that all those working at the trade shall
become members of the union. Where the union admits all qualified
workers to membership, under reasonable conditions, such a rule
can not become the basis of monopoly, and neither the rights of the
individual nor the public interest are infringed by its enforcement.
10. In some trades there are a considerable number of union rules
which restrict the productivity of the worker. Some of these rules
can be justified on the ground that they are necessary to the protec-
tion of the health of the worker. There are some, however, which
can not be defended; these rules are. antisocial and should be given
up. Experience has shown that where industry is regulated by well-
organized systems of joint agreements, such rules either disappear or
greatly decrease in number and importance. These limitations of
output should not, however, be considered as standing alone. The
limitations of output by associations of employers and by individual
corporations are equally antisocial and have far greater conse-
quence.
11. Jurisdictional disputes are the occasion of frequent and costly
strikes. The disputes of this character which have caused most in-
jury are in the building trades. Up to the present, the efforts to
lessen these disputes by -action of the national unions involved have
til
:
Df
KEPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 117
argely failed. It is suggested that the commission recommend to
the American Federation of Labor and to the national unions that
newed and more effective eiforts be made to prevent such disputes.
12. The essential condition for trade-union graft is the placing of
rhe authority to call strikes or to levy boycotts in the hands of one
person without adequate provision for supervision. This condition
does not exist in many unions. There is abundant evidence to show
that in very many cases it originates with employers who desire to
secure an advantage over their competitors. The reason that graft
is more prevalent in the building trades is that power is conferred on
the business agent to call strikes without reference either to the rank
and file or to the national officers. It has been testified by employers
who have given much attention to this problem that any well-organ-
ized association of employers can eliminate graft whenever its mem-
bers desire to do so. As far as the unions are concerned the solution
seems to lie in the increased participation of the rank and file in the
activities of the organization and increased provisions for fixing
responsibility upon their business agents.
•
XIII. ORGANIZATION, METHODS, AND POLICIES OF EMPLOYERS'
ASSOCIATIONS.
1. The commission finds that in the past 10 years there has been a
rapid growth in employers' associations. These associations, exclud-
ing those general associations which have been formed for the purpose
of advancing the political, commercial, or legal interests of the em-
ployers, may be divided into two classes, bargaining associations and
hostile associations. The bargaining associations deal with the
unions ; the hostile associations oppose collective bargaining.
2. The formation of bargaining associations is essential to the
existence of a satisfactory system of joint agreements. A consider-
able number of employers, although accepting the results of the
joint conferences in their trades, do not belong to the associations of
employers. It is highly desirable that all employers whose establish-
ments are run in accordance with the terms of a joint agreement
should be represented in making that agreement. In many bargain-
ing associations the control over the members is very weak. The
association has no power of discipline except expulsion, and where
participation in the making of the agreement is regarded as of little
importance expulsion is an inadequate remedy.
3. The hostile employers' association is a comparatively recent
development. In many cases these associations were formed for the
purpose of negotiating joint agreements with the unions, but after
the failure of negotiations or the breakdown of an agreement they
assumed their present form. In some cases associations which have
been hostile have resumed relations with the unions. There is a
strong tendency, however, for a hostile association after a few years
to develop principles and policies which make any agreement with the
unions impossible. The hostile association may be regarded, there-
fore, as a distinct species with definitely fixed characteristics.
t4. In the majority of hostile employers' associations, the basic
rinciple is that the conditions of employment shall be determined
^lely by the individual employer and the individual workman, but
i actual practice this results uniformly in the dictation of conditions
118 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
solely by the employer. The " declarations of principles " adopted
by these associations declare, for example, that the "number of
•apprentices, helpers, and handy men to be employed will be deter-
mined solely by the employer;" "employees will be paid by the
hourly rate, by premium system, by piecework, or contract, as the
employers may elect;" "since we, as employers, are responsible for
the work turned out by our workmen, we must have full power to
designate the men we consider competent to perform the work and
to determine the conditions under which that work will be prose-
cuted." Even as to wages these associations are unwilling to bargain
collectively, since they refuse to recognize a minimum wage or any
other standard form of wage, without which a collective agreement
is impossible.
5. In a few of the more highly centralized employers' associations
wage rates are set by the association, although other conditions may
be left to the individual employer. In these associations the principle
of individual bargaining is modified to the extent that certain mini-
mum conditions of employment are set by the association.
6. The prime function of the hostile associations is to aid their
members in opposing the introduction of collective bargaining. The
most important device used by the members of the associations in
resisting the attempts of the union to replace individual bargaining
by joint agreement is discrimination against members of the union.
Many of the associations have in their " declarations of principles "
the statement that no discrimination will be made against any man
because of his membership in any organization, but this rule is not
enforced. Ordinarily members of the union are not discriminated
against, but if the number of unionists increases in any shop until it
becomes large, the employer is advised or decides on his own volition
to hire no more members of the union. Moreover, any workman who
is prominent in urging the others to form a union is likely to be
dismissed. The aim of the association is to prevent in ordinary times
such an increase in the number of unionists as will lead to a collective
demand. The proposition is effective against collective action, as
membership of an individual workman in a union constitutes no
menace to the employer's power to control his business unless the
individual can persuade others to act with him.
7. Nearly all of the important associations maintain employment
agencies. These bureaus enable the members of the association to
select nonunionists for employment.
8. Practically all of the associations maintain a secret-service
department through which they are able to ascertain the increase
in the number of the trade unionists and the feeling of the men.
Through this information the association is able to forestall threat-
ened strikes and any other attempt to secure collective action on the
part of the workers.
9. In some of the associations an attempt is made to induce the
individual employer to change conditions when there is evidence
that dissatisfaction exists among his workmen. Similarly some of
the associations have been active in promoting safety systems and
welfare systems.
10. Inasmuch as the right of workers to organize in any manner
that they see fit is fully recognized by society and has repeatedly
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 119
been given a legal status in the decisions of even the. most conserva-
tive courts, there is strong reason for holding that these hostile
employers' associations, which are organized primarily for the pre-
vention of organization, are not only antisocial but even perhaps
illegal.
It is suggested that the commission strongly recommend:
1. The formation of strong and stable associations of employers
for the purpose of negotiating joint agreements and otherwise deter-
mining, upon a democratic and equitable basis, the fundamental
problems of the trade.
XIV. JOINT AGREEMENTS.
The investigations of the commission, conducted under the direc-
tion of Dr. George E. Barnett, as well as the evidence presented at
the public hearings, warrant the following conclusions:
1. The conditions of employment can be most satisfactorily fixed
by joint agreements between associations of employers and trade
unions.
2. Where the association of employers and the union participating
in the joint agreement cover the entire competitive district, it
becomes possible to regulate the trade or the industry, not merely
with reference to wages and hours, but with reference to unemploy-
ment, the recruiting of the trade, and the introduction of machinery
and new processes. The method of regulation by joint agreement
is superior to the method of legislative enactment, since it is more
comprehensive, is more elastic, and more nearly achieves the ideal
of fundamental democracy that government should to the greatest
possible extent consist of agreements and understandings voluntarily
made. The method of legislative enactment is inapplicable to many
trade problems, and even where it is supplemented by administra-
tive regulation it is cumbersome.
3. The essential element in a system of joint agreements is that
all action shall be preceded by discussion and deliberation. If either
party through lack of organization is unable to participate effectively
in the discussion and deliberation, to that extent the system falls
short of the ideal. Where a union or an employers' association
delivers its demands in the form of an ultimatum and denies the other
party an opportunity collectively to discuss the demands, a funda-
mental condition of the joint agreement is lacking.
4. The thorough and effective organization of the employers is
lacking in many trades in which the workmen are well organized.
It is highly desirable that such organization should be brought about.
5. In a few trades agreements have been made which provide that
the members of the union will not be allowed to work for any em-
ployers who are not members of the employers' association. The
usual result is that the employers' association restricts its member-
ship or in some other manner artificially raises prices to the con-
sumer. Such agreements are against the public interest and should
not be tolerated.
6. Joint agreements, on the whole, are well kept. There is a con-
stant increase in the sense of moral obligation on the part of both
employers and unions. Violations of agreements on the part of a
120 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
small number of men or of a single employer occasionally occur. It
is found that the unions tend more and more to punish by fines or
other disciplinary measure such infraction on the part of their mem-
bers. The great difficulty in the rapid solution of this problem is
that even graver evils than contract breaking are apt to result from
giving officials the power which they must have in order to punish
properly individuals or local unions for illegal strikes. The em-
ployers' associations, from the nature of the case, have less power
over their members, but in practically all cases they exercise in good
faith what power they have. Furthermore, since the employer in
the first instance has the power to interpret the contract, which he
may do unjustly, he may actually be guilty of the breach of contract
when the employees who strike against such unjust interpretation
are apparently the guilty parties.
7. In certain agreements a specified money guaranty is made by
each party, and in any breach of the agreement the guaranty is for-
feited to the other side. On the whole, such guaranties do not serve
a desirable purpose, since there is danger that the parties may come
to regard the forfeiture of the guaranty as a compensation for the
breach of the agreement.1 The sense of moral obligation is thus
seriously impaired.
8. It does not seem, nor has it been urged by any careful student
of the problem, whether employer or worker, that any good end
would be served by giving legal validity to joint agreements. The
agreements are formulated by parties acting without legal advice,
and it not infrequently happens that the form of words adopted is
capable of several constructions. In some cases the language is in-
tentionally general, though its purpose may be fully understood by
the different parties. It is not desirable that such agreements, the
only ones possible under the circumstances, should be construed by
the rigid rules customarily used in the courts.
9. Every joint agreement should contain a clause providing for
arbitration in the event that the interpretation of the agreement is
in dispute. Under such provision the arbitrator would approach
the question unhampered by strict rules of construction. The re-
sponsibility for breaking an agreement would under such a plan be
definitely located.
It is suggested that the commission recommend :
1. The extension of joint agreements as regards not only the field
of industry which they cover and the class of labor included but the
subjects which are taken up for negotiation and settlement. Greater
responsibility for the character, skill, and conduct of their members
should accompany the greater participation of trade-unions in the
governing of industry.
XV. AGENCIES OF MEDIATION, INVESTIGATION, AND ARBITRATION.
The result of the very extensive investigations which have been
made regarding the agencies for mediation and arbitration in this
country and abroad have been embodied in the plan for legislation,
which is attached hereto. The plan as presented is limited to a
national system, but it is recommended that the State legislatures
1 This statement is not in accordance with the finding of Dr. Barnett, but is formed
after consideration of the evidence and opinion of the British Industrial Council.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 121
•
should enact legislation along the same general lines. The general
principles which have governed in drawing up this plan may be
tated as follows:
1. The Mediation Commission should be independent of and defi-
nitely divorced from every other department of the State or Federal
Government. Its only power grows out of its impartiality, and this
can not be secured if it is subordinate to any other body whose
sympathies either with labor or with capital can be questioned.
2. Mediation should be entrusted to a person as far as possible
distinct from those who act as arbitrators or appoint arbitrators.
3. The office of mediator should be placed beyond the suspicion
that the office is being used as a reward for party services.
4. The mediator should appoint his own subordinates,
5. It is desirable in the event of the failure of mediation by an
official mediator that the parties should be asked to consent to the
appointment of a board of mediation and investigation consisting
of three persons, one selected by each party and the third by these
(wo. Such a board, it appears, would be able to secure an agree-
ment in many cases where the mediator fails. These boards should
have power to summon witnesses and compel the production of
papers. In the event that the board could not secure an agreement
during the investigation, it should be empowered to make a public
report stating the terms on which, in its judgment, the parties should
settle.
6. In those cases in which the parties are unable to agree on the
third member of the board of mediation and investigation, he should
be appointed in the State systems by the State board of arbitration,
and in the national system by the mediators, from a list prepared
in advance by an advisory board consisting of 10 representatives of
employers' associations and 10 representatives of trade unions.
7. National boards of mediation and investigation are to be formed
nly in disputes involving interstate commerce and in those cases
in which the legislature or the executive of a State has requested
the intervention of the Federal Government.
8. The Secretary of Labor, or in the States the official bureau or
commission, which is created for the protection of the workers,
should be employed to appear before the board of mediation and
investigation, when it is holding public hearings, either at the request
of the board as amicus curiae in the ascertainment of facts regard-
ing labor conditions, or, if appealed to, as the spokesman for the
employees in the presentation of their case.
PROPOSED PLAN OF A NATIONAL SYSTEM OF MEDIATION, INVESTIGATION,
AND ARBITRATION.
ORGANIZATION.
1. Scope of authority. — The National Mediation Commission
should be given exclusive authority to intervene, under the conditions
hereinafter defined, in all industrial disputes involving any corpora-
tion, firm, or establishment, except public service establishments,
which is engaged in interstate commerce or whose products enter into
interstate or foreign commerce.
122 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
This provision differentiates its functions from those of the media-
tion commission existing at present under the Newlands Act. It is
considered desirable for the present to provide for the existence of
the two commissions, at least until the proposed commission has been
thoroughly tested. It is believed to be wise, however, to provide for
their close cooperation from the very beginning, with the idea that
they will ultimately be consolidated.
It will be noted that this provision also will have the effect of sup-
planting the mediation powers which are now vested in the Depart-
ment of Labor. There is no desire to criticise or belittle the past
activities of the mediators operating under the Department of Labor,
for such criticism is absolutely unwarranted. It is also freely- ad-
mitted that the Department of Labor has not had either the time or
the resources necessary for the proper development of .this function.
The proposal is made, however, primarily upon three grounds which
seem to be sound and, in fact, compelling: First, the function of
mediation depends absolutely upon the permanent assurance of im-
partiality. The Department of Labor was created to represent the
interests of labor, and it seems not only inevitable but desirable and
proper that the Secretary of Labor should always be drawn from the
ranks of organized labor. The function of mediation may be admin-
istered with absolute impartiality under any particular Secretary,
or even under every Secretary, and yet it seems impossible, even
under such conditions, to create that absolute assurance of impar-
tiality which is the prime essential. Second, it is the prerogative and
duty of the Department of Labor to act, aggressively if need be, for
the protection of the workers at all times, and to utilize every resource
at its command to giye them that protection. The Department must
necessarily be greatly impeded in such frankly partisan action, it
would seem, if it must at the same time preserve either the substance
or the shadow of impartiality in carrying out its function of media-
tion. Third, in the bitterest disputes, where the public interest
most strongly demands intervention, mediation is seldom successful,
and a stage is quickly reached where the most vital necessity is for
the full and exact facts regarding the dispute, in order that public
opinion may be intelligently formed and directed. Experience has
shown that such facts can best be secured fully, quickly, and effec-
tively through the medium of public inquiry. This means that the
inquiring body must have power to summon witnesses, compel the
production of books and papers, and compel testimony, or the pro-
ceeding is worse than a farce. It may be regarded as certain that
such powers will never be entrusted to the Department of Labor.
2. Membership. — The members of the Mediation Commission
should be appointed by the President, with the advice and consent
of the Senate. The members should represent in proper balance the
interests of employers, employees, and the public. The members
should serve for terms of six years.
3. Advisory board. — The President of the United States should
designate an equal number of leading organizations of employers
and leading organizations of employees to appoint representatives
to act as an advisory body to the President, to Congress, and to the
Mediation Commission. This body, designated hereinafter the ad-
visory board, should give advice regarding the duties of the commis-
sion, the administration of its affairs and the selection of mediators,
REPORT OP COMMISSION ON INDUSTRIAL RELATIONS. 123
and be empowered to make recommendations regarding legislation.
The advisory board should also prepare lists of persons who may be
called upon to serve on boards of arbitration and on boards of media-
tion and investigation. The advisory board should be called together
at least once a year by the chairman of the Mediation Commission;
it should have an organization independent of the commission and
elect its own chairman and secretary.
The members of the advisory board should be paid traveling and
other necessary expenses and such compensation as may be determined
upon. Provision should be made for the removal of members by the
organizations which they represent.
4. Subordinate officers and assistants. — The Mediation Commission
should have power to appoint, remove at pleasure, and fix the com-
pensation of a secretary (and a limited number of clerks). The
appointment of other officers and assistants, such as mediators, exam-
iners, investigators, technical assessors, experts, disbursing officer,
clerks, and other employees, should be subject to the civil-service
rules. But arrangements should be made to have the examination
include experience and other proper qualifications, and to give the
Mediation Commission power to examine all candidates orally.
POWERS, DUTIES AND JURISDICTION.
5. In interstate commerce. — (a) Mediation: Whenever a contro-
versy concerning conditions of employment arises between employer
and employees engaged in interstate commerce .other than public
service corporations, either party should be able to apply to the
chairman of the Mediation Commission for its services in the bring-
ing about of an amicable adjustment of the controversy. Or, the
chairman of the commission should be authorized to offer, on his own
initiative, the services of the mediators of the commission. If efforts
to bring about an amicable adjustment through mediation should be
unsuccessful, the commission should at once, if possible, induce the
parties to submit their differences to arbitration.
(b) Arbitration: Procedure should be similar to that outlined
in the Newlands Act. If it is necessary for the Mediation Commis-
sion to appoint arbitrators, they should Ibe taken from a list prepared
by the advisory board.
(c) Boards of mediation and investigation: If the parties to the
controversy can not be induced to arbitrate, and if the controversy
should threaten to interrupt the business of employers and employees
to the detriment of the public interest, the commission should be
authorized to request the two parties to consent to the creation of a
board of mediation and investigation. If the consent of the parties
to the controversy is secured, the commission shall form such a board.
Of the three members of the board, one should be selected by the
employers, one by the employees and a third on the recommendation
of the members so chosen. If either side fails to recommend a mem-
ber, he should be appointed by the commission. If after a stated
time the third member is not recommended, the commission should
select him. Appointments to boards of mediation arid investigation
shall be made by the commission from a list prepared for fills pur-
pose by the advisory board. The board of mediation and investiga-
tion should offer its friendly offices in bringing about a settlement of
124 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
the dispute through mediation. If mediation should not be success-
ful and if the parties to the controversy refuse to arbitrate, this
board should have power to make an investigation of the contro-
versy, and should be required to submit to the commission a full
report thereon, including recommendations for its settlement. The
commission should be empowered to give this report and recommen-
dations adequate publicity.
(d) Powers to secure evidence: A board of mediation and inves-
tigation should have power to administer oaths, to subpoena and
compel the attendance and testimony of witnesses and the produc-
tion of books, papers, documents, etc., and to conduct hearings and
investigations, and to exercise such other similar powers as might be
necessary. It should not have power to prohibit or to impose pen-
alties for strikes or lockouts.
6. Not in interstate commerce. — It should be provided that the
commission, or a board of mediation and investigation created by it,
may exercise the foregoing powers except the compulsory powers
under subdivision " d " of proposal 5, for settling industrial con-
troversies between parties not engaged in interstate commerce, if
they are requested to do so by the governor or legislature of a State,
or by the mayor, council, or commission of a municipality.
7. The Secretary of Labor and the Secretary of Commerce should
be authorized to bring to the attention of the commission any dispute
in which the intervention of the commission seems desirable. The
Secretary of Labor, or such officer as he may designate, should also
be authorized to appear before any board of mediation and investi-
gation, either at the request of the board as amicus curiae for the
ascertainment of facts regarding labor conditions, or, if appealed to,
as a spokesman for the employees in the presentation of their case.
COOPERATION.
8. Cooperation with State and local authorities. — The commission
should be authorized and directed to cooperate with State, local and
territorial authorities and similar departments of foreign countries
which deal with the adjustment of industrial disputes.
9. Cooperation with other Federal agencies. — The commission
should, as far as practicable, coordinate its activities and cooperate
with other Federal departments in the performance of their duties.
XVI. INDUSTRIAL CONDITIONS AND THE PUBLIC HEALTH — SICKNESS
INSURANCE.
The investigations which have been conducted by the commission
under the direction of Dr. B. S. Warren, of the Public Health
Service, are the basis for the following conclusions :
1. Each of the thirty-odd million wage earners in the United
States loses an average of nine days a year through sickness. At
an average of $2 per day, the wage loss from this source is over
$500,000,000. .At the average cost of ircdical expenses ($6 per capita
per year) there is added to this at the very least $180,000,000.
2. Much attention is now given to accident prevention, yet acci-
dents cause only one-seventh as much destitution as does sickness
and one-fifteenth as much as does unemployment. A great deal of
unemployment is directly due to sickness, and sickness, in turn, fol-
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 125
Ivvs unemployment. The commission's recent study in Indiana
owed that 17.9 per cent of unemployment among women in stores
that State was due to illness. In 1901, a Federal investigation
25,440 workmen's families showed that 11.2 per cent of heads of
milies were idle during the year on account of sickness, and that
the average period of such unemployment was 7.71 weeks. Other
investigations show that 30 to 40 per cent of cases requiring charit-
able relief are immediately due to sickness.
3. Sickness among wage earners is primarily the direct result of
poverty, which manifests itself in insufficient diet, bad housing,
inadequate clothing, and generally unfavorable surroundings in the
home. The surroundings at the place of work and the personal
habits of the worker are important but secondary factors.
4. There are three general groups of disease-causing conditions:
(1) Those for which the employer and character of the industry
and occupation are responsible; (2) those for which the public,
rough regulatory and relief agencies, is responsible; and (3) those
r which the individual worker and his family are responsible.
5. The employers' responsibility includes, besides conditions caus-
ig so-called occupational diseases, low wages, excessive hours, meth-
ds causing nervous strain, and general insanitary conditions. Many
employers already partly recognize their responsibility; aside from
" welfare work," many contribute liberally to employees' sick bene-
fit funds or provide for the entire amount.
6. The public has in part recognized its responsibility in such mat-
ters as housing, water supply, foods, drugs, and sanitation. But the
recognition of responsibility has not been thoroughgoing, and in
the case of local health officers the tendency has been too frequently
to provide for the better residential sections and neglect the slums.
7. The greatest share of responsibility rests upon the individual,
and under present conditions he is unable to meet it. This inability
exists by reason of the fact that the majority of wage earners do not
receive sufficient wages to provide for proper living conditions, and
because the present methods of disease prevention and cure are ex-
pensive and sickness is most prevalent among those who are least
able to purchase health. The worker is expected to provide for
almost certain contingencies in the future when he lacks means of
existing adequately in the present.
8. If we might reasonably expect a rapid increase in the wages of
all classes of workers to a standard which would permit proper living
conditions and adequate medical attention, it would perhaps be inad-
visable to recommend any governmental action. But we feel as-
sured that no such condition is to be expected in the near future and
believe that new methods of dealing with the existing evils must
be adopted.
9. The remedial measures for existing conditions must be based on
the cooperative action of those responsible for conditions; must be
democratic in maintenance, control, and administration; must dis-
tribute costs practicably and justly; and must provide a powerful
incentive for sickness prevention.
10. A system of sickness insurance is the most feasible single meas-
ure. This conclusion is based on the following:
(a) The losses occasioned by the wage earner's sickness affect
employee, employer, and community, all of whom share in the re-
126 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
sponsibility. Insurance is the recognized method of distributing
loss so as to reduce individual risk to a minimum.
(b) The strongest of incentives — that of lessening cost — is given
to efforts to diminish frequency and seriousness of losses; sickness
insurance in this respect is a preventive measure of a positive and
direct kind. The lower the morbidity and mortality rates, the less
the amount necessary for benefits and the lower the insurance rate.
(c) Sickness insurance is no longer experimental, but is rapidly
becoming universal. It is not a novelty even in the United States.
Although not provided for nor subsidized by Government here, it is
most widely used, there being several million workers so insured.
(d) The cost would be no greater than at present. The conclusion
appears sound that medical benefits and minimum cash benefits of
$7 per week for a period not exceeding 26 weeks in one year, and
death benefits of $200, can be provided at a total cost of 50 cents
per week per insured person. Budgetary studies of large numbers
of workingmen's families show that under present conditions from
25 and 50 cents a week up to TO cents and even $1.86 is spent for
little more than burial insurance. Workers would thus receive im-
measurably greater benefits for much less than they now pay.
11. A governmental system of sickness insurance is preferable
because —
(a) More democratic; the benefits would be regarded as rights,
not charity.
(b) Compulsory features, obnoxious under private insurance,
would be no longer objectionable.
(c) On account of the reduction in overhead charges and dupli-
cation, higher efficiency in administration would be secured at less
cost.
(d) Cooperation with other public agencies is impracticable other-
wise.
(e) European experience has proved the superiority of Govern-
ment systems to private insurance.
(/) Taxation of industry by Federal Government in sickness-
insurance system is thoroughly established by the Marine- Hospital
Service. Law taxing vessels for such fund was passed in 1798, and
its constitutionality has never been questioned.
12. The conclusion seems warranted that a sickness-insurance sys-
tem for the United States or the several States similar in general
principles and methods to the best European systems will be less diffi-
cult and radical than has been foreboded. It will not so much intro-
duce new ideas and practices as it will organize existing plans and
principles into more effective accomplishment. Existing agencies,
in. trade-unions, mutual benefit societies, and establishment funds,
can be utilized just as they have been in Europe. The real problem
becomes one of constructive organization.
It is suggested that the commission recommend a Federal system
of sickness insurance, constructed along the lines here briefly sum-
marized.
1. Membership. — The membership shall comprise all employees of
persons, firms, companies, and corporations engaged in interstate
commerce, or whose products are transported in interstate commerce,
or which may do business in two or more States. The employees of
intrastate establishments to be permitted to be insured, if they so
elect, under regulations to be prescribed by the commission.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 127
2. Fund. — The fund is to be created by joint contributions by
employees, employers, and the Government, the last named sufficient
for expenses of administration. Such contributions should probably
be in the proportion of 50 per cent from workers, 40 per cent from
employers, and 10 per cent from the Government. Individuals or
groups desiring larger benefits may arrange to make larger pay-
ments, and the rate in any trade, industry, or locality may be reduced
where conditions so improve as to make a lower rate adequate. The
contributions are to be secured through taxing each interstate em-
ployer a certain amount weekly for each employee, the part con-
tributed by workers to be deducted from their wages, thus using the
regular revenue machinery of the Government.
3. Benefits. — Benefits to be available for a limited period in the
form of cash and medical benefits during sickness, nonindustrial
accidents, and child bearing ; death benefits to be of limited size and
ayable on presentation of proper evidence.
4. Administration. — The administration of the insurance funds is
be carried out by a national sickness insurance commission. The
_ational commission should be composed, by presidential appoint-
ment with Senate confirmation, of a director (who would be chair-
man), representatives of employers and representatives of employees
in equal ratio, and, as ex officio nonvoting members, tlie Federal
Commissioner of Labor Statistics and the Surgeon General of the
Public Health Service. The commission should be empowered to
supervise all funds and determine their character and limits of
jurisdiction ; promulgate all regulations necessary to enforce the act ;
establish and maintain hospitals; maintain staffs of medical exam-
iners, specialists, dentists, and visiting nurses ; provide for medicines
and appliances; make contracts with local physicians; cooperate
with local funds and health authorities in disease prevention; and
provide for collecting actuarial data.
Correlation of the insurance system with the medical profession,
the lack of which has been a- serious defect in German and British
systems, is absolutely necessary. Contracts with physicians should
allow to each a per capita payment for the insured persons under his
care, the right of selection of physician to be retained by the insured.
For the signing of certificates entitling the insured to benefits, and
for treating the insured in hospitals, the Surgeon General should
detail physicians from the Public Health Service, their entire time
to be given to these and other duties (consulting with local physi-
cians, enforcing Federal laws and regulations, and cooperating with
local authorities).
XVII. EDUCATION IN RELATION TO INDUSTRY.
The report dealing with this question has been presented by Com-
missioner Lennon, and is printed on pages 253-261.
XVIII. SCIENTIFIC MANAGEMENT.
The investigation of scientific management was conducted by
Prof. Robert F. Hoxie, with the expert assistance and advice of Mr.
Robert G. Valentine, representing the employer's interest in manage-
ment, and Mr. John P. Frey, representing the interests of labor. The
investigation grew out of public hearings held by the commission
128 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
during the spring of 1914, at which the almost unqualified opposition
of labor to scientific management was manifested. The purpose of
the investigation was to test by the results of actual practice the
claims of scientific management and the charges of the representatives
of organized labor.
The investigation, which covered a period of more than a year,
was made with the greatest care and thoroughness. Thirty-five
shops and systematizing concerns were examined and interviews
were had with a large number of scientific management leaders,
experts, and employers. The shops visited w^ere, almost without
exception, those designated by authorities on scientific management,
such as Messrs. Taylor, Gantt, and Emerson, as the best representa-
tives of the actual results of scientific management. In other words,
the examination was practically confined to the very best examples
of scientific management. The defects and shortcomings pointed out
hereinafter are, therefore, characteristic of the system under the most
favorable conditions.
As a result of their investigations, Prof. Hoxie, Mr. Valentine, and
Mr. Frey submitted a report, agreed upon without exceptions, in
which the statements and recommendations which follow are em-
bodied. These statements constitute a very brief summary of the
entire report, wThich should be read as a whole if a complete under-
standing of their results and findings is desired.
Throughout the report the term " scientific management " is under-
stood to mean the system devised and applied by Frederick W.
Taylor, H. L. Gantt, Harrington Emerson and their followers, with
the object of promoting efficiency in shop management and operation.
The report, unanimously agreed upon by the commission's inves-
tigator and his advisory experts, is the basis for the following
statements.
POSSIBLE BENEFITS OF SCIENTIFIC MANAGEMENT TO LABOR AND SOCIETY.
1. As a system, scientific management presents certain possible
benefits to labor and to society :
(a) A close casual relation exists between productive efficiency and
possible wages. Greater efficiency and output make possible higher
wages in general and better conditions of employment and labor.
In so far, then, as scientific management affords opportunities for
lower costs and increased production without adding to the burden
of the workers in exhaustive effort, long hours, or inferior working
conditions, it creates the possibility of very real and substantial
benefits to labor and to society.
(b) It is the policy of scientific management, as a preliminary to
strictly labor changes, to bring about improvement and standardiza-
tion of the material equipment and productive organization of the
plant, particularly :
Machinery: Installation, repair, operation.
Tools: Storage, care, delivery.
Material equipment : Rearrangement to avoid delays, etc.
Product: Devices for economical and expeditious handling and
routing.
Processes and methods: Elimination of Avaste motions, improve-
ment of accessories, etc.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 129
Reorganization of managerial staff and improvement of managerial
efficiency.
Reorganization of sales and purchasing departments with a view to
broadening and stabilizing the market.
Improvements in methods of storekeeping and regulation of deliv-
ery, surplus stock, etc.
All such improvements are to be commended, and investigation
shows that they are not only accepted by labor without opposition
but are, in fact, welcomed.
2. Scientific management in its direct relation to labor is not devoid
of beneficial aspects, inasmuch as it is to a large extent an attempt at
immediate standardization of labor conditions and relations. It may
also serve labor by calling the attention of the employer to the fact
that there are other and more effective ways to meet severe com-
petition than by " taking it out of labor."
It is true that scientific management and organized labor are not
altogether in harmony in their attitude toward standardization of
labor conditions and relations. While both seek to have the con-
ditions of work and pay clearly defined and definitely maintained at
any given moment, they differ fundamentally as to the circumstances
which may justly cause the substitution of new standards for old
ones. Trade-unionism tends to hold to the idea that standards must
not be changed in any way to the detriment of the workers. Scien-
tific management, on the other hand, regards changes as justified and
desirable if they result in increase of efficiency, and has provided
methods, such as time study, for the constant suggestion of such
changes.
3. The same may be said of many other major claims of scientific
management. Whether the ideals advocated are attained or at pres-
ent attainable, and whether scientific managers are to be found who
purposely violate them, scientific management has in these claims
and in the methods upon which they are based shown the way along
which we may proceed to more advantageous economic results for
labor and for society. It may not have succeeded in establishing a
practical system of vocational selection and adaptation, but it has
emphasized the desirability of it; it may not set the task with due
and scientific allowance for fatigue so that the worker is guarded
against overspeeding and overexertion, but it has undoubtedly de-
veloped methods which make it possible to better prevailing condi-
tions in this respect; it has called attention most forcibly to the evils
of favoritism and the rough and arbitrary decisions of foremen and
others in authority. If scientific management be shown to have posi-
tive objectionable features, from both the standpoint of labor and
the welfare of society, this constitutes no denial of these beneficial
features, but calls rather for intelligent social action to eliminate
that which is detrimental and to supplement and control that which
beneficial to all.
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inpn
1C MANAGEMENT IN PRACTICE — ITS DIVERSITIES AND DEFECTS,
4. Conditions in actual shops do not conform to the ideals of the
stem, and show no general uniformity. Actual field investigations
emonstrated beyond reasonable doubt that scientific management
practice is characterized by striking incompleteness and manifold
38819°— 16 9
130 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
diversity as compared with the theoretical exposition of its advo-
cates. This incompleteness and diversity in practice apply not only
to matters of detail but cover many of the essential features of
scientific management even among those shops designated by Taylor,
Gantt, and Emerson as representative of their work and influence.
The following particular defects were observed:
(a) Failure to carry into effect ^vith any degree of thoroughness
the general elements involved in the system. — This may take the
form of ignoring either ^the mechanical equipment and managerial
organization, adopting simply a few routine features, such as time
study and bonus payment, or the adoption of all mechanical features
with a complete disregard of the spirit in which they are supposed
to be applied.
(5) Failure to adopt the full system of "functional foreman-
ship" — The results of prevailing practices do not support the claim
that scientific management treats each workman as an independent
personality and that it substitutes joint obedience to fact and law for
obedience to personal authority.
(c) Lack of uniformity in the method of selecting and hiring
help. — Upon the whole the range of excellence in methods of selec-
tion and hiring in " scientific " shops was the same as in other shops.
The workers in scientific-management shops seem to be a select class
when compared with the same classes of workers outside, but this
result seems to be due to the weeding out of the less satisfactory
material rather than to initial methods of selection.
(d) Failure to substantiate claims of scientific management with
reference to the adaptation, instruction, and training of workers. —
Scientific-management shops in general depend upon nothing in the
way of occupational adaptation of the workers except the ordinary
trial and error method. Investigation reveals little to substantiate the
sweeping claims of scientific managers made in this connection, except
that in the better scientific-management shops many workmen are
receiving more careful instruction and a higher degree of training
than is at present possible for them elsewhere. The most that can
be said is that scientific management, as such, furthers a tendency
to narrow the scope of the workers' industrial activity, and that it
falls far short of a compensatory equivalent in its ideals and actual
methods of instruction and training.
e) Lack of scientific accuracy, uniformity, and justice in time
study and task setting. — Far from being the invariable and purely
objective matters that they are pictured, the methods and results of
time study and task setting are in practice the special sport of indi-
vidual judgment and opinion, subject to all the possibilities of diver-
sity, inaccuracy, and injustice that arise from human ignorance and
prejudice.
The objects of time study are: (1) Improvement and standardiza-
tion of the methods of doing the work, without reference to a stand-
ard time for its accomplishment, and (2) fixing of a definite task
time of efficiency scale.
Possibilities of great advantage exist in the use of time study for
the first purpose. However, in a large number of shops, time study
for this purpose is practically neglected.
In connection with the second purpose, setting of task time or
efficiency scale, great variations are noted, and especially the part
pr
ge:
re*
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 131
which fallible individual judgment and individual prejudice may
and do play.
Detailed observations of the practice of making time studies and
setting tasks showed great variations in methods and results. Seven-
teen separate sources of variation are pointed out, any one of which
is sufficient to and in practice does greatly influence the results of
time studies.
In face of such evidence it is obviously absurd to talk of time study
as an accurate scientific method in practice or of the tasks set by
means of it as objective scientific facts which are not possible or
proper subjects of dispute and bargaining.
Furthermore, the time-study men upon whom the entire results
depend were found to be prevailingly of the narrow-minded mechani-
cal type, poorly paid, and occupying the lowest positions in the man-
agerial organization, if they could be said to belong at all to the
managerial group. Nor does the situation seem to promise much im-
rovement, for the position and pay accorded to time-study men
nerally are such as to preclude the drawing into this work of
really competent men in the broader sense. Aside from a few
notable exceptions in the shops and some men who make a general
profession of time study in connection with the installation of scien-
tific management, this theoretically important functionary, as a rule,
receives little more than good mechanic's wages and has little voice
in determining shop policies. In fact, the time-study man, who, if
scientific management is to make good the most important of its
labor claims, should be among the most highly trained and influential
officials in the shop, a scientist in viewpoint, a wise arbitrator be-
tween employer and workman, is in general a petty functionary, a
specialist workman, a sort of clerk who has no voice in the counsels
of the higher officials.
However, the method of time study is not necessarily impracticable
or unjust to the workers. Under proper direction time study prom-
ises much more equitable results than can be secured by the ordinary
methods. The greatest essential is a time-study man of exceptional
knowledge, judgment, and tact. The average time-study man does
not fulfill these requirements at present.
Finally, it is only in connection with standard products, requiring
only moderate skill and judgment in layout and work, that economy
seems to allow adequate application of the time-study method. Its
natural sphere seems to be routine and repetitive work. As long as
industry continues to be as complex and diversified as it is, this ele-
ment of economy will without doubt continue to operate in a way
to limit the legitimate scope of time study and task setting. Task
setting as at present conducted is not satisfactory to workmen and
creates dissatisfaction and jealousy.
(f) ^Failure to substantiate the claim of having established a
scientific and equitable method of determining wage rates. — In
analyzing the wage-fixing problem in connection with scientific
management two matters are considered: (1) The "base rate,5' some-
times called the day wage, which constitutes for any group of work-
ers the minimum earnings or indicates the general wage level for
that group, and (2) added "efficiency payments," which are sup-
posed to represent special additional rewards for special attainments.
132 KEPOST OF COMMISSION ON INDUSTRIAL KELATIONS.
^ investigators sought in vain for any scientific methods de-
vised or employed by scientific management for the determination
of the base rate, either as a matter of justice between the conflicting
claims of capital and labor, or between the relative claims of in-
dividuals and occupational groups.
Kates for women with reference to men are, as a rule, on the same
basis in scientific-management shops as in other shops. One leader
said, "There is to be no nonsense about scientific management. If
by better organization and administration what is now regarded as
man's work can be done by women, women will be employed and
women's wages will be paid."
Scientific-management shops seem as ready as others to raise the
rates as the wage level generally advances.
" Bewildering diversity " prevails in relation to the " efficiency
payment" or reward for special effort. After a careful and ex-
tended analysis and investigation of the different ways of reward-
ing individual increases in output, it was concluded:
All of these systems definitely belie the claim that scientific man-
agement pays workers in proportion to their efficiency. One of them
has the obvious intent of weeding out the lower grade of workers,
while the other two are so constituted as to make such workers very
unprofitable to the employers. Two of them, lend themselves easily to
the exploitation of mediocre workers — those who can deliver a medium
output but can not attain to a standard task set high. All of them
furnish a strong stimulus to high efficiency and output, but in them-
selves furnish no visible check on overspeeding and exhaustion. All
of them are capable of being liberally applied, but all can also be used
as instruments of oppression through the undue severity of task set-
ting or efficiency rating.
There can be no doubt that under scientific management rates are
cut. But to say positively that scientific management, on the whole,
furthers the cutting of rates is quite another matter. The fact seems
clear that at this point there is a conflict of tendencies within the thing
itself. There is a strong inducement for scientific managers to main-
tain rates strictly, and the honest efforts of those who deserve the
name to so maintain them can hardly be impugned. At the sanio
time, however, the greatest advance toward efficiency, for which
scientific management stands, is obtained by the constant alteration
of conditions and tasks through time study. Such alterations almost
of necessity mean constant rate cutting. Were industry once stand-
ardized for good and all, scientific management would undoubtedly
operate as an unequivocal force tending to the maintenance of rates.
As it is with industry in flux, what amounts to rate cutting seems to
be almost of necessity an essential part of its very nature.
Finally, all of the systems of payment tend to center the attention
of the worker on his individual interest and gain and to repress the
development of group consciousness and interest. Where the work
of one man is independent of another, the individual has no motive
to consider his fellow, since his work and pay in no wise depend on
the other man. What either does will not affect the other's task or
rates. Where work is independent, the leader can not afford to slow
down to accommodate his successor.
It must be admitted that these systems are admirably suited to
stimulate the workers, but in so far as there may be virtue in the
EEPOET OF COMMISSION ON INDUSTRIAL RELATIONS. 133
5
union principles of group solidarity and uniformity, and in so far
as they lay claim to scientific accuracy or a special conformity to
justice in reward, they must be judged adversely.
(g) Failure to protect the workers from overexertion and exhaus-
tion.— It is claimed by scientific management that protection to
orkers is afforded by such devices as: Standardization of equip-
ient and performance ; substitution of exact knowledge of men and
f machines for guesswork in the setting of the task and the deter-
mination of -the hours and other conditions of work ; careful studies
of fatigue; elimination of the need for pace setters; transformation
of speeders into instructors, and transfer of responsibility from the
workers to the management for contriving the best methods of work ;
maintenance of the best conditions for performing work through fur-
nishing the best tools and materials at the proper time and place;
instruction of the wrorkers in the most economical and easiest methods
of performing operations; institution of rational rest periods and
modes of recreation during working hours; and surrounding the
workers with the safest and most sanitary shop conditions.
Investigation indicates that scientific management, in practice, fur-
nishes no reasonable basis for the majority of these specific claims
in the present, and little hope for their realization in the near future.
In these matters, indeed, the utmost variation prevails in scientific
management as in other shops. Several admirable cases were found
with respect to all these matters, but shops were not wanting where
the management exhibited the utmost suspicion of the workers, refer-
ring continually to their disposition to "beat the time-study man,"
although the time study in such shops was obviously based on the
work of speeders and all sorts of inducements were offered for pace
setting, where instruction and training of the workers w^ere empha-
sized by their absence, and where the general conditions of the work
w^ere much in need of improvement.
The investigation seems to show clearly that practical scientific
management has not materially affected the length of the working
day. Aside from shops where the management was evidently imbued
with a strong moral sense, the hours of; labor in these shops were
those common to the industry and the locality.
When we come to the matter of fatigue studies and their connec-
tion with speeding and exhaustion, the claims of scientific manage-
ment seem to break down completely. No actual fatigue studies
were found taking place in the shops, and the time-study men, who
should be charged with such studies, seemed in general to be quite
indifferent or quite ignorant in regard to this whole matter. This
does not mean that no attention to fatigue is given in scientific man-
agement shops. Cases were found where the health and energy of
the workers wTere carefully observed and attempts were made to
adopt the work to their condition, but the methods employed were
the rough-and-ready ones of common-sense observation. Best periods
and modes of recreation during the working hours are a regular
institution on an extended scale in but one shop visited by the inves-
tigators. Isolated instances were encountered elsewhere, but man-
agers in general apparently do not even entertain the idea of their
institution.
Scientific management does not always surround the workers with
the safest and most sanitary shop conditions. In general, scientific
134 BEPOET OF COMMISSION ON INDUSTRIAL RELATIONS.
management shops seem to be good shops as shops go. The introduc-
tion of the system has the tendency without doubt to clean the shop
up and to improve the condition of belting, machinery, and arrange-
ment of material equipment generally. All this is in the direct
line of efficiency and safety. Several very notable examples of
excellence in safety and sanitation were found. On the other hand,
several shops visited were below good standards in these respects,
and flagrant specific violations of safety rules were encountered.
As a wrhole, the facts in nowise justify the assumption that scien-
tific management offers any effective guaranty against overspeeding
and exhaustion of workers. The investigation left a strong impres-
sion that scientific management workers in general are not over-
speeded, but the challenge to show any overspeeded or overworked
men in scientific management shops in very easily met. The situa-
tion in this respect varies much wdth the industry. Some instances
of undoubted overspeeding were found, particularly in the case of
girls and women. But these instances do not warrant a general
charge. On the other hand, there appears to be nothing in the special
methods of scientific management to prevent speeding up where the
technical conditions make it possible and profitable, and there is
much in these methods to induce it in the hands of unscrupulous
employers.
(A) Failure to substantiate the claim that scientific management
offers exceptional opportunities for advancement and promotion on
a basis of individual merit. — While scientific management undoubt-
edly separates the efficient from the inefficient more surely and
speedily than ordinary methods, it was shown by the investigation
that scientific management often fails in the development of func-
tional foremanship and in the elimination of favoritism. It tends
to create a multitude of new tasks on which less skill is required and
lower rates can be paid. It has developed no efficient system for the
placing or adaptation of the workers. It is inclined in practice to
regard a worker as adapted to his work and rightly placed when he
succeeds in making the task. It tends to confine the mass of work-
men to one or two tasks, and offers little opportunity, therefore, for
the discovery and development of special aptitudes among the masses.
It tends to divide the workers into two unequal classes — the few
who rise to managerial positions and the many who seem bound to
remain task workers within a narrow field. In the ideal it offers
opportunity for promotion from the ranks, and this works out to a
certain extent in practice, but not universally.
There is a great deal of exaggeration, too, in statements made con-
cerning special rewards for usable suggestions. Few of the shops
make any systematic rewards of this kind, and where this is the case
the rewards are usually trivial. In one shop the investigator was
shown an automatic machine invented by a workman, which did the
work of several hand workers. "Did he receive a reward? " was
asked. " Oh, yes," came the answer, " his rate of pay was increased
from 17 to 22 cents per hour."
(i) With reference to the alleged methods and severity of dis-
cipline under scientific management the " acrimonious criticism "
from trade unions does not seem to be warranted. — In theory, the
scientific managers appear to have the best of the argument, and in
REPORT OF COMMISSION OS" INDUSTRIAL RELATIONS. 135
practice the investigation showed an agreeable absence of rough
and arbitrary disciplinary authority. When the tasks were liberally
set, the workers were found generally operating without special
supervision except where instructions or assistance were needed.
Deductions were indeed made for poor work and destruction of ma-
terials, but in the better class of shops apparently with no greater
and perhaps with less than ordinary severity.
While it should be remembered that the shops selected represented
probably the best of the shops operating under this system, in gen-
eral, it would seem that scientific management does lessen the rigors
of discipline as compared with other shops where the management is
autocratic and the workers have no organization,
(/') Failure to substantiate the claim that workers are discharged
only on just grounds and have an effective appeal to the highest
managerial authority. — This whole matter is one in which neither
management claims nor union complaints seem susceptible of proof,
but the investigation indicates that the unions have legitimate basis
for charging that discharge is generally a matter of arbitrary
managerial authority.
(k) Lack of democracy under scientific management. — As a result
of the investigation, there can be little doubt that scientific manage-
ment tends in practice to weaken the power of the individual worker
as against the employer, setting aside all questions of personal atti-
tude and the particular opportunities and methods for voicing com-
plaints and enforcing demands. It gathers up and transfers to the
management the traditional craft knowledge and^ transmits this
again to the workers only piecemeal as it is needed in the perform-
ance of the particular job or task. It tends in practice to confine
each worker to a particular task or small cycle of tasks. It thus
narrows his outlook and skill to the experience and training which
are necessary to do the work. He is therefore easier of displacement.
Moreover, the changing of methods and conditions of work and the
setting of tasks by time study with its assumption always of scientific
accuracy puts the individual worker at a, disadvantage in any attempt
to question the justice of the demands made upon him. The onus
of proof is upon him and the standards of judgment are set up by
the employer, covered by the mantle of scientific accuracy.
It would seem also that scientific management tends, on the whole,
to prevent the formation of groups of workers within the shop with
recognized common interests, and to weaken the solidarity of those
which exist. Almost everything points to the strengthening of the
individualistic motive and the weakening of group solidarity. Each
worker is bent on the attainment of his individual task. He can not
combine with his fellows to determine how much that task shall be,
If the individual slows down he merely lessens his wages and preju-
dices his standing without helping his neighbor. If he can beat
the other fellow, he helps himself without directly affecting the
other's task or pay. Assistance, unless the man is a paid instructor,
is at personal cost. Special rewards, where offered, are for the indi-
vidual. Rules of seniority are not recognized. Sometimes personal
rivalry is stimulated by the posting of individual records or classifi-
cation of the workers by name into " excellent," " good," " poor," etc.
Potential groups are broken up by the constant changes in methods
and reclassification of workers which are the mission of time study.
136 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
The whole gospel of scientific management to the worker is to the
individual, telling him how, by special efficiency, he can cut loose
from the mass, and rise in wages or position.
With the power of the individual weakened and the chances
lessened for the development of groups and group solidarity, the
democratic possibility of scientific management, barring the presence
of unionism, would seem to be scant. The individual is manifestly in
no position to cope with the employer on a basis of equality. The
claim to democracy based on the close association of the management
and the men and the opportunities allowed for the voicing of com-
plaints is not borne out by the facts ; and in the general run of scien-
tific-management shops, barring the presence of unionism and col-
lective bargaining, the unionists are justified in the charge that the
workers have no real voice in hiring and discharging, the setting of
the task, the determination of the wage rates, or the general condi-
tions of employment. This charge is true even where the employers
have no special autocratic tendencies, much more so therefore where,
as in many cases, they are thoroughly imbued with the autocratic
spirit. With rare exceptions, then, democracy under scientific man-
agement can not and does not exist apart from unionism and collec-
tive bargaining.
Does the scientific manager, as a matter of fact, welcome the coop-
eration of unionism? Here, again, the facts should decide the con-
tention. The fact is that while in numbers of scientific-management
shops some unionists are employed, they are not generally employed
as union men, and the union is rarely recognized and dealt with as
such. The fact is that those who declare the willingness of scientific
management to welcome the cooperation of unionism in general either
know nothing about unionism and its rules and regulations or
are thinking of a different kind of unionism from that to which the
American Federation of Labor stands committed and a kind of co-
operation foreign to its ideals and practices.
To sum up, scientific management in practice generally tends to
weaken the competitive power of the individual worker and thwarts
the formation of shop groups and weakens group solidarity; more-
over, generally scientific management is lacking in the arrangements
and machinery necessary for the actual voicing of the workers' ideas
and complaints and for the democratic consideration and adjustment
of grievances. Collective bargaining has ordinarily no place in the
determination of matters vital to the workers, and the attitude
toward it is usually tolerant only when it is not understood. Finally
unionism, where it means a vigorous attempt to enforce the viewpoint
and claims of the workers, is in general looked upon with abhorrence,
and unions which are looked upon with complacency are not the
kind which organized labor in general wants, while the union cooper-
ation which is invited is altogether different from that which they
stand ready to give. In practice scientific management must, there-
fore be declared autocratic in tendency — a reversion to industrial
autocracy, which forces the workers to depend on the employers' con-
ception of fairness and limits the democratic safeguards of the
workers.
5. Scientific management is still in its infancy or early trial stages,
and immaturity and failure to attain ideals in practice are necessary
accompaniments to the development of any new industrial or social
EEPOET OF COMMISSION ON INDUSTRIAL EELATIONS. 137
movement. Doubtless many of its diversities and shortcomings will,
therefore, be cured by time.
Before this can be brought about, however, certain potent causes of
resent evil must be eradicated:
(a) The first of these is a persistent attempt on the part of experts
nd managers to apply scientific management and its methods outside
their natural sphere.
(&) A second chief source of danger and evil to labor in the
application of scientific management is that it offers its wares in the
en market, but it has developed no means by which it can control
, use of these by the purchaser. In large part the practical de-
.arture of scientific management from its ideals is^ the result of
pecial managerial or proprietorial aims and impatience of delay
n their fulfillment. The expert is frequently called in because the
.stablishment is in financial or industrial straits, and the chief con-
cern of the management is quick increase of production and profits.
It must meet its competitors here and now, and can not afford to
expend more than is necessary to do this, or to forego immediate
returns while the foundations are being laid for a larger but later
success, and with careful regard to immediate justice and the long-
time welfare of its working force. The outcome frequently is con-
flict between the systematizer and the management, resulting in the
abandonment of the scheme only partially worked out on the retire-
ment of the expert, leaving the management to apply crudely the
methods partially installed, sometimes to the detriment of the work-
ers and their interests.
It is true that the situation thus outlined is not of universal appli-
cation. But bitter complaints were frequently heard from members
of the small ^roup of experts who represent the highest ideals and
intelligence of the movement, in regard to the managerial opposition
which they have encountered, and frequent apologies were offered
for the conditions and results of their work, accompanied by the
statement that they could go no further than the management would
allow, or that things had been done by the management against their
judgment and for which they could not stand. Moreover, scientific
management is closely interlocked with the mechanism of production
for profit and the law of economy rules. Many things which would
be desirable from the ideal standpoint, and which are a practical
necessity if the interests of the workers are to be fully protected,
are not always or usually economical. This is specially true of time
study, task setting, and rate making.
The arbitrary will of the employer and the law of economy are
two potent special forces which contribute to the existing diversity,
incompleteness, and crudity of scientific management as it is prac-
ticed, even where the systematizer is possessed of the highest intelli-
gence and imbued with the best motives of his group.
(<?) But to explain the situation as it exists at present, two other
important factors must be taken into consideration. The first of
these is the existence and practice of self-styled scientific management
systematizers and time study experts who lack in most respects the
ideals and the training essential to fit them for the work which they
claim to be able to do. Scientific management as a movement is
cursed with fakirs. The great rewards which a few leaders in the
movement have secured for their services have brought into the field
138 EEPOET OF COMMISSION ON INDUSTRIAL KELATIONS.
a crowd of industrial " patent medicine men." The way is open to
all. No standards or requirements, private or public, have been
developed by the application of which the goats can be separated
from the sheep. Employers have thus far proved credulous. Almost
anyone can show the average manufacturing concern where it can
make some improvements in its methods. So the scientific manage-
ment shingles have gone up all over the country, the fakirs have gone
into the shops, and in the name of scientific management have reaped
temporary gains to the detriment of both the employers and the
workers.
(d) Fake scientific management experts, however, are not alone
responsible for the lack of training and intelligence which contributes
to the diversity and immaturity of scientific management in practice
and its failure to make good the labor claims of its most distinguished
leaders. The fact is that on the whole, and barring some notable
exceptions, the sponsors and adherents of scientific management —
experts and employers alike — are profundly ignorant of very much
that concerns the broader humanitarian and social problems which
it creates and involves, especially as these touch the character and
welfare of labor.
It is because of this ignorance and unwarranted assurance that
there is a strong tendency on the part of scientific management
experts to look upon the labor end of their work as the least difficult
and requiring the least careful consideration. To their minds the
delicate and difficult part of the task of installation is the solution
of the material, mechanical, and organic problems involved. They
tend to look upon the labor end of their work as a simple technical
matter of so setting tasks and making rates that the workers will
give the fullest productive cooperation. They tend naively to assume
that when the productivity of the concern is increased and the la-
borers are induced to do their full part toward this end, the labor
problem in connection with scientific management is satisfactorily
solved. In short, in the majority of cases the labor problem appears
to be looked at as one aspect of the general problem of production
in the shop, and it is truthfully assumed that if it is solved with
reference to this problem it must also be solved with due regard
to labor's well-being and its just demands. This seems to have
been the characteristic attitude of scientific management from the
beginning. Labor was simply looked upon as one of the factors
entering into production, like machinery, tools, stores, and other
elements of equipment. The problem was simply how to secure an
efficient coordination and functioning of these elements. It was
only after the opposition of labor had been expressed that scientific
management began to be conscious of any other aspect of the labor
matter. And with some notable exceptions scientific management ex-
perts and employers still look upon the labor matter almost solely
as an aspect of the general production problem, and have little posi-
tive interest or concern in regard to it otherwise.
It is probable that scientific managers will object to these state-
ments, pleading that they are mainly variations and conditions due
to the time element or to the necessity imposed by the law of costs.
They will say, for example, that when a new and unusual job comes
in, neither time nor economy will allow of careful time studies, and
if careful studies were made of all the variations of a complicated
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 139
a
s
task, the expense of such studies would wipe out the profit; that, in
general, they are proceeding toward the full realization of the ideal
of scientific management as fast as economy will allow. But such
pleas would serve only to confirm the main contention that scientific
managers and scientific management employers generally are neces-
sarily ruled, like all members of the employing group, by the forces
of cost and profits; that to them the labor problem is primarily an
aspect of the problem of production, and that in the ends the needs
and welfare of labor must be subordinated to these things. Beneath
all other causes or shortcomings of scientific management, therefore,
in its relation to labor, there seems1 to be the practical fact of an
opposition of interests between the profit-taking and the labor group,
which makes extremely doubtful the possibility that its shortcomings
from the standpoint of labor are capable of elimination.
GENERAL LABOR PROBLEMS.
6. (a) Scientific management at its best furthers the modern ten-
dency toward the specialization of the workers. Its most essential
features — functional foremanship, time study, task setting, and effi-
ciency payment — all have this inherent effect.
Under the scientific management system fully developed, the ordi-
nary mechanic is intended to be and is, in fact, a machine feeder and
a machine feeder only, with the possibility of auxiliary operations
clearly cut off and with means applied to discourage experimentation.
And what applies to the machine feeder applies with more or less
thoroughness to machine and hand operatives generally.
But it is not merely in stripping from the job its auxiliary opera-
tions that scientific management tends to specialize the work and the
workmen. Time study, the chief cornerstone of all systems of
scientific management, tends inherently to the narrowing of the job
or task itself. As the final object of time study, so far as it directly
touches the workers, is to make possible the setting of tasks so simple
and uniform and so free from possible causes of interruption and
variation that definite and invariable time limits can be placed upon
them, and that the worker may be unimpeded in his efficient per-
formance of them by the necessity for questioning and deliberation,
the preponderating tendency of time study is to split up the work
into smaller and simpler operations and tasks. Decidedly, then,
time study tends to further the modern tendency toward specializa-
tion of the job and the task.
With functional foremanship lopping off from the job auxiliary
operations, and time study tending to a narrowing of the task itself,
task setting and efficiency methods of payment come into play as
forces tending to confine the worker to a single task or a narrow
range of operations. The worker is put upon the special task for
which he seems best adapted, and he is stimulated by the methods of
payment employed to make himself as proficient as possible at it.
When he succeeds in this, to shift him to another task ordinarily in-
volves an immediate and distinct loss to the employer, and the worker
himself naturally resents being shifted to a new task since this in-
volves an immediate loss in his earnings. Here worker and em-
ployer are as one in their immediate interest to have the job so
140 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
simple that the operation can be quickly learned, and the task made,
and, that shifting of tasks be eliminated as far as possible. The
employer besides has another motive for this, in that the shifting of
the workers multiplies the records and renders more complex the
system of wage accounting. It is true that the scientific manage-
ment employer, like any other, must have a certain number of workers
in the shop who are capable of performing a plurality of tasks. But
the tendency is to have as few all-round workers as are necessary to
meet these emergencies. The methods of scientific management
operate most effectively when they break up and narrow the work of
the individual, and 'the ends of scientific management are best served
when the rank and file of the workers are specialists.
This inherent tendency of scientific management to specialization
is buttressed, broadened in its scope and perpetuated by the pro-
gressive gathering up and systematizing in the hands of the employ-
ers of all the traditional craft knowledge in the possession of the
workers. With this information in hand and functional foreman-
ship to direct its use, scientific management claims to have no need
of craftsmen, in the old sense of the term, and, therefore, no need for
an apprenticeship system except for the training of functional fore-
men. It therefore tends to neglect apprenticeship except for the
training of the few. And as this body of systematized knowledge in
the hands of the employer grows, it is enabled to broaden the scope
of its operation, to attack and specialize new operations, new crafts
and new industries, so that the tendency is to reduce more and more
to simple, specialized operations, and more and more workers to the
positions of narrow specialists. Nor does scientific management
afford anything in itself to check or offset this specialization ten-
dency. The instruction and training offered is for specialist work-
men. Selection and adaptation are specializing in their tendencies.
Promotion is for the relatively few. The whole system, in its con-
ception and operation, is pointed toward a universally specialized
industrial regime.
(&) But scientific management is not only inherently specializing;
it also tends to break down existing standards and uniformities set
up by the workmen, and to prevent the establishment of stable con-
ditions of work and pay. Time study means constant and endless
change in the method of operation. No sooner is a new and better
method discovered and established and the condition of work and
pay adapted to it than an improvement is discovered involving per-
haps new machinery, new tools and materials, a new way of doing
things, and a consequent alteration of the essential conditions of
work and pay, and perhaps a reclassification of the workers.
(c) Ample evidence to support this analysis was afforded by the
investigation. Where the system was found relatively completely
applied, the mass of the workers were engaged in specialized tasks,
there was little variation in the operations except in emergencies,
apprenticeship for the many was abandoned or was looked upon as
an investment which brought no adequate returns and was slated
for abandonment; almost everywhere scientific management em-
ployers expressed a strong preference for specialist workmen, old
crafts wrere being broken up and the craftsmen given the choice of
retirement or of entering the ranks of specialized workmen; in the
most progressive shops, the time study men were preparing the way
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 141
__r a broader application of the system by the analytical study of
the operations and crafts not yet systematized. Changes in methods
and classification of workers were seen even during the short course
of the investigation.
(d) What does this mean from the standpoint of labor and labor
elf are ? Certain conclusions are inevitable. Scientific management,
fully and properly applied, inevitably tends to the constant break-
down of the established crafts and craftsmanship and the constant
elimination of skill in the sense of narrowing craft knowledge and
workmanship except for the lower orders of workmen. Some scien-
tific management employers have asserted belief in their ability to
get on a paying basis within three months, should they lose their
whole working force except the managerial staff and enough others
> maintain the organization, if they had to begin all over again
"th green hands. What this means in increased competition of
rkmen with workmen can be imagined. Were the scientific man-
ment ideal fully realized, any man who walks the street would be
a practical competitor for almost any workman's job.
Such a situation would inevitably break clown the basis of present-
day unionism and render collective bargaining impossible in any ef-
fective sense in regard to the matters considered by the unions most
essential. It has been proved by experience that unskilled workers
generally find it most difficult to maintain effective and continuous
organization for dealing with complicated industrial situations. Ef-
fective collective bargaining can not exist without effective organi-
zation. Moreover, we have already seen how scientific management,
apart from the matter of skill, tends to prevent the formation and
Jeakens the solidarity of groups within the shops.
But, beyond all this, time study strikes at the heart and core of the
principles and conditions which make effective unionism and collec-
tive bargaining possible with respect to certain most essential mat-
ters. When the employer can constantly initiate new methods and
conditions and reclassify the work and the workmen, he can evade
all efforts of the union to establish and maintain definite and con-
tinuous standards of work and pay. Time study is in definite oppo-
sition to uniformity and stable classification. It enables the employer
constantly to lop off portions of the work from a certain class and
then to create new classifications of workers, with new conditions of
work and pay. Add to all of -this the advantage gained by the em-
ployers in the progressive gathering up and systematization of craft
knowledge for their own uses, and the destruction of apprenticeship,
which cuts the workers off from the perpetuation among them of
craftsmanship, and the destructive tendencies of ^ scientific^ manage-
ment as far. as present-day unionism and collective bargaining are
concerned, seems inevitable.
(e) Under these circumstances the progressive degeneration of
craftsmanship and the progressive degradation of skilled craftsmen
also seems inevitable.
(/) The ultimate effects of scientific management, should it be-
come universal, upon wages, employment, and industrial peace, are
matters of pure speculation. During the period of transition, how-
ever, there can be little doubt of the results. The tendency will be
first toward a realignment of wage rates. The craftsmen, the highly
trained workers, can not hope to maintain their wage advantage over
142 KEPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
the semiskilled and less skilled workers. There will be a leveling
tendency. Whether this leveling will be up or down, it is impossible
to say. At present scientific management seems to be making the
relatively unskilled more efficient than ever before, and they are in
general receiving under it greater earnings than ever before. It is
evident, however, that the native efficiency of the working class must
suffer from the neglect of apprenticeship. Scientific managers have
themselves complained bitterly of the poor material from which they
must recruit their workers, compared with the efficient and self-
respecting craftsman who applied for employment 20 years ago.
Moreover, it must not be overlooked that the whole scheme of
scientific management, and especially the gathering up and systema-
tizing of the knowledge formerly the possession of the workmen,
tends enormously to add to the strength of capitalism. This fact,
together with the greater ease of displacement shown above, must
make the security and continuity of employment inherently more
uncertain.
If generally increased efficiency is the result of scientific manage-
ment, unemployment w^ould in the end seem to become less of a
menace. But during the period of transition its increase should be
expected. Not only must the old craftsmen suffer as the result of
the destruction of their crafts, but until scientific management finds
itself able to control markets its increased efficiency must result in
gluts in special lines, with resulting unemployment in particular
trades and occupations. A leading scientific-management expert
has stated that one shop of six in a certain industry systematized by
him could turn out all the product that the market would carry.
The result to the workers, if the statement be true, needs no explana-
tion. Scientific management would seem to offer possibilities ulti-
mately of better market control or better adaptation to market condi-
tions, but the experience of the past year of depression indicates that
at present no such possibilities generally exist.
Finally, until unionism as it exists has been done away with or
has undergone essential modification, scientific management can not
be said to make for the avoidance of strikes and the establishment
of industrial peace. The investigation, has shown several well-authen-
ticated cases of strikes which have occurred in scientific-management
shops. They are perhaps less frequent in this class of shop than
elsewhere in similar establishments, owing largely to the fact that
organized workmen are on the whole little employed. In its exten-
sion, however, it is certain that scientific management is a constant
menace to industrial peace. So long as present-day unionism exists
and unionists continue to believe, as they seem warranted in doing,
that scientific management means the destruction of their organiza-
tions or their present rules and regulations, unionism will continue
to oppose it energetically and whenever and wherever opportunity
affords.
It has been said with much truth that scientific management is
like the invention of machinery in its effect upon workers and social
conditions and welfare generally — that it gives a new impulse to
the industrial revolution which characterized the latter part of the
eighteenth and nineteenth centuries and strengthens its general
effects and tendencies. A chief characterization of this revolution
has been the breakdown of craftsmanship, the destruction of crafts,
BEPOBT OF COMMISSION ON INDUSTRIAL RELATIONS. 143
and the carrying of the modern industrial world toward an era of
specialized workmanship and generally semiskilled or unskilled
workmen. Scientific management seems to be another force urging
us forward toward this era.
CONCLUSIONS.
1\ Our industries should adopt all methods which replace inac-
•acy with accurate knowledge and which systematically operate to
ninate economic waste. Scientific management at its best has suc-
ded in creating an organic whole of the several departments of
institution, establishing a coordination of their functions which
lias previously been impossible, and, in this respect, it has conferred
great benefits on industry.
The social problem created by scientific management, however,
does not lie in this field. As regards its social consequences neither
organized nor unorganized labor finds in scientific management any
adequate protection to its standards of living, any progressive means
for industrial education, any opportunity for industrial democracy
by which labor may create for itself a progressively efficient share
in management. Therefore, as unorganized labor is totally un-
equipped to work for these human rights, it becomes doubly the duty
of organized labor to work unceasingly and unswervingly for them,
and, if necessary, to combat an industrial development which not only
does not contain conditions favorable to" their growth, but, in many
respects, is hostile soil.
XIX. PRISON LABOR.
The evidence which has come before the commission is the basis
for the following statements :
1. The practice of using convicts in penitentiaries and prisons
generally for the manufacture of articles for general commerce has
been productive of evil results as regards not only the convicts but
the general public.
2. The competition of prison-made articles has resulted in the
existence of a low wage scale in many industries and has subjected
the manufacturers to a kind of competition which should not exist
in any civilized community.
3. The only beneficiaries of the convict labor system are the con-
tractors who are permitted by the State to exploit the inmates of
prisons.
4. The individual States are powerless to deal adequately with
this situation because of the interstate shipment of convict-made
goods.
It is suggested that the commission recommend :
1. The abolition as far as possible of indoor manufacture, and the
substitution of such outdoor work as that upon State farms and
State roads, providing that where prisoners are employed they
should be compensated and that the products which they manufac-
ture should not be sold in competition with the products of free
labor.
2. The enactment by Congress of a bill providing that all convict-
made goods when transported into any State or Territory of the
United States shall be subject to the operation of the laws of such
144 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
State or Territory to the same extent and in the same manner as
though such goods had been produced therein.
XX. IMMIGRATION.
The evidence presented to the commission is the basis for the fol-
lowing statements :
1. The immigration policy of the United States has created a
number of our most difficult and serious industrial problems and has
been responsible in a considerable measure for the existing state of
industrial unrest.
2. The enormous influx of immigrants during the past 25 years
has already undermined the American standard of living for all
workmen except those in the skilled trades, and has been the largest
single factor in preventing the wage scale from rising as rapidly as
food prices.
3. The great mass of non-English-speaking workers, who form
about one-half of the labor force in the basic industries, has done
much to prevent the development of better relations between em-
ployers and employees.
4. The presence of such a large proportion of immigrants has
greatly hampered the formation of trade-unions and has tremen-
dously increased the problem of securing effective and responsible
organizations.
5. The unreasonable prejudice of almost every class of Americans
toward the immigrants, who form such a large proportion of the
labor force of our industries, has been largely responsible for the
failure of our Nation to reach a correct understanding of the labor
problem and has promoted the harshness and brutality which has so
often been manifested in connection with industrial disturbances.
It has been and to a large measure still is felt possible to dismiss the
most revolting working conditions, the most brutal treatment, or
the most criminal invasions of personal rights, by saying, " Oh, well,
they are just ignorant foreigners."
6. If immigration had continued at the average rate of the past
10 years it would have proved almost, if not quite, impossible to have
brought industrial conditions and relations to any proper basis, in
spite of the most extreme efforts of civic organizations, trades-unions,
and governmental machinery. The great diminution of immigration
as a result of the European war has already begun to show its
salutary effects.
It is suggested that the commission recommend :
1. The enactment of legislation providing for the restriction of im-
migration based upon the general provisions contained in the so-
called Burnett-Dillingham bill, which has received the approval of
two successive Congresses. With a full realization of the many
theoretical objections which have been urged against the literacy
test, the consensus of evidence is so strong that its practical work-
ings would be to restrict immigration to those who are likely to
make the most desirable citizens, to regulate immigration in some
degree in proportion to the actual needs of American industry, and
finally to promote education in Europe, that it seems necessary at
least to urge that this plan be given a practical test.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 145
12. The enactment of legislation providing that within six months
om the time of entry all immigrants shall be required, under
penalty of deportation, either to declare their intention to become
C* 'izens by taking out their first papers or to definitely register them-
ves with the proper authority as alien tourists, and further pro-
ling that all immigrants wyho have failed to take out their first
pers at the end of two years shall be deported, as shall all who
il to take out their second papers when they become eligible, de-
portation in each case to act as a bar to future entry.
3. The provision by the States and municipalities, with the assist-
ance of the Federal Government, if necessary, for the education of
all adult persons who are unable to speak, read, or write the English
tnguage. In order to accomplish this it may be necessary to pro-
de that employers shall grant certain definite periods of leisure
r such instruction.
XXI. LABOR CONDITIONS IN AMERICAN COLONIAL POSSESSIONS.
The attention of the commission was directed to the labor condi-
tions in American colonies by the strike of some 20,000 agricultural
laborers in the island of Porto Rico, and by the appeal of the repre-
sentatives of the Free Federation of Labor of Porto Rico for a hear-
ing at which they might present their statement of the labor condi-
tions, relations between laborers and employers, and the attitude
assumed by the local Government during the strike. The commission
granted the hearing and, in order that a full and fair presentation
of the conditions should be made, invited the Government of Porto
Rico to appoint representatives who were fully acquainted with the
situation. As a result of the hearing of the testimony of these wit-
nesses, a situation, was found which demands immediate attention
in order that widespread and deep-rooted evils should be eliminated.
These conditions are in large measure an inheritance from centuries
of despotic Spanish rule, and it is undeniable that great improve-
ments in certain lines have been accomplished under American ad-
ministration. Nevertheless, a peculiar responsibility rests upon the
American Nation for the conditions of the people in our colonial
possessions who occupy the position morally and legally of wrards of
the Nation.
The investigations were confined to the conditions in Porto Rico,
but through the petitions filed with the commission by the inhabi-
tants of other islands and through the information contained in re-
ports of governmental officials, it seems certain that the labor condi-
tions in all American colonies are generally similar to those in Porto
Rico, and demand the attention of Congress.
As a result of the investigations and a careful analysis of the
extensive documentary evidence filed, the following statements with
regard to industrial and social conditions in Porto Rico are war-
ranted :
1. Laborers in Porto Rico, including men, women, and children,
are employed at wages which are inadequate to furnish proper food
and clothing. The wages of men in agricultural districts range from
35 to 60 cents a day, when employed, and those of the women and
" ildren are about one-half this amount.
38819°— 16 10
146 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
2. As a result largely of the low-wage standard, the diet of the
laborers, consisting chiefly of rice, beans, codfish, and plantains, is
so miserably inadequate that the worker not only is rendered ineffi-
cient but is to a large extent undernourished.
3. The laborers are further exploited on the large plantations,
according to the testimony of the Government representatives, by
exorbitant prices for food and other supplies, by deliberate cheating
as regards weights and measures, and by unwarranted deductions
from their wages for goods that were never purchased.
4. The educational facilities of Porto Rico are so totally inade-
quate that there are nearly 200,000 children for whose education no
provision has been made.
The representatives of the colonial Government give a lack of
ability to finance the educational system as the reason for the present
conditions.
5. Many thousand people yearly, located in the rural districts, far
from medical attendance and unable to afford the high charges of
the physicians, die without medical attendance.
6. The labor laws of Porto Rico are inadequate, and the Bureau
of Labor is not provided with sufficient funds to enforce the existing
laws. The laws supposed to regulate the labor of women and chil-
dren are generally violated. The provisions of the law restraining
child labor are largely nullified by the insertion of a clause which
permits this labor if the child is accompanied by a parent or other
relative.
The employers' liability law of the island has the archaic fellow -
servant clause in it and therefore is noneffective.
7. The great majority of the Porto Ricans are landless, the land
of Porto Rico being largely owned by the corporations, wealthy
landlords, and the colonial Government and municipalities. Very
little land is for sale.
8. As a result, the land rents are inordinately high and tend very
strongly to retard the development of a middle class.
9. The housing conditions of the workers are extremely bad. The
majority of the rural workers live in huts which do not cost more
than $10 to build, and these huts are occupied, on an average, by five
people each, although at best there are only semipartitions dividing
the huts into two rooms. The existing conditions are a menace not
only to health but to morality and every sense of decency.
10. The laborers may be ejected from the huts provided by the
employers at any time that the owner sees fit, and, while they pay no
rent, they must and do work for the owner at his pleasure.
11. In the cities the conditions are almost equally bad. The city
laborers rent apartments or build little houses on rented land. As
an illustration of this condition : There were, in 1912, 10,936 people
in Puerto de Tierra. These people lived in 1,144 houses, and practi-
cally 98 per cent of them were renters, as the occupants of only 30
houses owned both house and land. The land of one owner, which
was assessed at $6,340, brought in a total rent of $2,580, or 37.4 per
cent. That of another, assessed at $29,460, yielded $7,821 in rent, or
23.9 per cent.
12. Unemployment is very prevalent in the island, and it has been
testified that, largely as the result of stimulated immigration, there
are between 200,000 and 300,000 more workers than jobs.
I
EEPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 147
:;
13. The immigrants from the English-speaking islands or from
the mainland are given preference over the native Porto Ricans, who
speak Spanish. This has resulted in much hardship to the natives.
11. The strike of agricultural laborers and other workers which
;-an in January, 1915, was not only justified but was in the interests
the progress of the island. The long hours, low wages, and ex-
oitation of the laborers .could not have been relieved except by their
ganized action. This is in accord with the testimony of the Govern-
nt representatives.
15. These laborers, hitherto unorganized, excitable, and filled with
sense of the grievous wrongs which they and their families had
ffered, were poorly disciplined and may have been guilty of excesses
speech and action, although there is much evidence to indicate that
ey were peaceful and law-abiding until provoked by the agents of
e employers or by the police.
16. Whatever may have been the actions of the strikers, however,
there can be no excuse for the actions of the police and municipal
authorities, who violated the personal rights of the strikers, treated
em in many cases with wanton brutality, resulting in the death of
rge numbers, held them in excessive bail, denied them access to the
ordinary processes of the courts, and inflicted excessive and unwar-
ranted punishments upon them.
IT. The blame for such conditions appears to rest primarily upon
e rural police and local magistrates.
18. The demands for legislation made by the representatives of the
ree Federation of Labor of Porto Rico appear to be wise and
reasonable, but without an opportunity for full local investigation it
is impossible to fully indorse them.
It is suggested that the commission recommend provision by Con-
gress for early and thorough investigation of the industrial and
ial conditions in Porto Rico and all other American colonies.
soc
XXII. CHINESE EXCLUSION.
The investigations with reference to that section of the act which
directed the commission to inquire " into the question of smuggling
or other illegal entry of Asiatics into the United States or its insular
possessions " were made largely under the direction of Mr. E. A.
Fitzpatrick and Mr. E. H. Busiek. The extensive evidence collected
regarding this entire question is contained in the report of Mr. Fitz-
patrick, which is submitted herewith.
The constructive suggestions and recommendations which have
been approved by the special subcommittee on Chinese exclusion, con-
sisting of Chairman Frank P. Walsh and Commissioners Harris
Weinstock and James O'Connell, and accepted by the entire commis-
sion, with reservations as to the agency of administration, are as
follows :
CONSTRUCTIVE SUGGESTIONS.
CHANGES IN THE £AW.
The following changes should be made in the law in the interest of
administrative efficiency :
1. That the many laws relating to the exclusion of Chinese be
codified into a comprehensive statute.
148 EEPOKT OF COMMISSION ON INDUSTRIAL RELATIONS.
2. That Chinese alleged to have entered the United States sur-
reptitiously shall be tried by administrative process, i. e., on Secre-
tary of Labor's warrant — in all cases irrespective of time of entry
or defense of citizenship.1 At the present time only Chinese alleged
to have entered within three years may be tried on Secretary's war-
rant.
3. That immigration officers be specifically given the power of
arrest or taking into custody.
4. That immigration officers be given the right to administer bind-
ing oaths in all cases arising under the immigration law.
5. That immigration officials be given the power to compel attend-
ance of witnesses and the production of documentary or other evi-
dence in all cases providing for punishment for contempt.
6. That the attacking of an immigration official or interference
with him in the performance of his duties, or any maltreatment of
him growling out of the performance of his duties, should be made
a penal offense.
7. That the place of deportation to which contraband Chinamen
shall be sent may be, in the discretion of the Secretary of Labor, the
country whence he came, or the country of his citizenship, or the
trans- Atlantic or trans-Pacific port from which he embarked for this
continent
8. That there be a clearer and more definite legislative definition
of the exempt and of the admitted classes.
9. That there be a clearer definition of legislative policy as to the
status under the immigration and Chinese-exclusion law of China-
men admitted as exempts and subsequently assuming a nonexempt
status.
10. That the pecuniary and family conditions for the return of
Chinese laborers in the United States to China be repealed.
11. That the recommendation of a new registration because it is
needed to enforce the ^resent law be rejected. This must not be
understood to mean a rejection of a new registration law as a part of
legislative policy, but solely when it is urged for administrative
reasons.
12. That masters of vessels be responsible for every Chinese mem-
ber of their crew who was on board the vessel when it enters and is
not on board when it is ready for clearance.
1 The anomalous citizenship situation. — A Chinese person can not become a citizen by
naturalization. The child of a Chinese alien man and woman, who themselves could
never become citizens, would be, if born in the United States, an American citizen. The
fact that the parents never intend that the child should be an American citizen, and the
child itself even when grown up never regards himself as an American citizen except for
purposes of the Chinese exclusion law, does not enter into the matter. The child of an
American citizen born on foreign soil — China or elsewhere — is an American citizen.
Chinese arrested for being unlawfully in the United States set up the claim of nativity.
This claim is in many cases fraudulent. The matter is easy. A Chinaman, when ar-
rested, is told to stand mute, or, if the story has been concocted, he tells a story like
this : " I was born in San Francisco [or in some rural place, where there are no records of
birth]. My father and mother returned to China when I was four years old. I remained
with my clansman, Mr. Y-M-G, who has since returned to China or died. For the past
four years I have remained with my uncle, who was at the baptismal — shaving — feast,
and can testify to these facts." Uncle testifies. United States commissioner discharges
the Chinaman, and if nativity was the defense the citizenship of the Chinaman is res
judicata. Thus are citizens made. '
A rather dangerous situation is developing in this connection. In one large city of
the country definite efforts are being made to vote the Chinaman and have his citizen-
ship established that way. This of ^necessity brings the question into local politics and
complicates further an already awkward situation. This situation ought to be cleared
up. The fundamental change required is an amendment to the Constitution.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 149
UNITED STATES COMMISSIONERS.
11. That the jurisdiction of United States commissioners in Chi-
ese-exclusion cases be abolished, or, what is less desirable.1
2. That the following changes in the system be made: United
Jtates commissioners should receive adequate compensation for the
service rendered. United States commissioners should be "made
courts of record and stenographic and other expenses provided for.
The Government should be given right of appeal in Chinese cases.
THE JUDICIAL SYSTEM.
1. That the handling of cases of contraband Chinamen should be
andled by administrative rather than by judicial procedure.
2. That the present administrative procedure be continued prac-
ically without modification, except for the improved handling of
ppeals as recommended elsewhere in these suggestions.
3. That writs of habeas corpus should be issued only on the basis
of a prima facie case.
4. That in criminal cases (smuggling) full sentences should be
imposed instead of light sentences as at present.
5. That, if advisable, the cases of contraband Chinamen might be
held under the board of special inquiry procedure provided for in
cases of immigrants not passed upon primary inspection for admis-
sion. The adoption of this suggestion would necessitate the employ-
ment of a considerable number of additional men, and for this reason
ought not to be adopted immediately.
GENERAL ADMINISTRATION.
1. Definitely withdraw the order of 1905.
2. By conference with Treasury Department provide for more
careful sealing and supervision of sealed freight cars crossing the
border —
(a) By placing seal number and place of each car on the manifest.
(b) By taking number and place of each seal of each car independ-
ently and testing seal.
I(c) By comparing local record with manifest immediately.
(d) By examination of contents of each car where there is the
east discrepancy or suspicion.
THE SELECTION OF INSPECTORS.
--
1. That the position of Chinese inspector be revived.
2. That the selection of Chinese inspectors by civil-service exami-
nation for general immigrant inspectors be continued.
3. That the present examination be changed in scope as follows :
(a) That all papers now required be omitted ercept " practical
uestions."
1 All interests would be best served by an administrative rather than a judicial pro-
cedure in cases of contraband Chinese. As usual, writs of habeas corpus would be issued
by the courts in case of arbitrary action or of jurisdiction in these cases.
150 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
(b) That greater credit — larger proportion of examination — be
given for practical experience in handling the public.
(c) That new examination in report writing be given to include
a practical test in condensation — material to relate to immigration,
formulation of a report on a given statement of fact, letter writing.
(d) That the examination include a test on Canadian immigration
laws. *
(e) That it include a test of knowledge of our National Govern-
ment, particularly of those departments that are related to the work
of immigration —
Treasury Department.
Congress.
The judicial system.
Department of State.
(/) That, if possible, an oral examination be included.
(g) That the examination include somewhere questions on the
relation of immigration and emigration to a national policy, on
immigration as an internal policy, and a general history of immi-
gration.
4. That the examination have specific reference in its questions to
immigration work and not be mere general tests.
5. That Chinese inspectors be selected from the more experienced
immigrant inspectors who show an inclination and ability in the
special requirements of this end of the service.
6. That the probationary period of an immigrant inspector be one
year.
CHINESE INTERPRETERS.
1. That in the selection of interpreters the present examination be
continued except that, in testing ability to translate or interpret,
actual cases be taken in course of routine work rather than the pres-
ent moot examination.
2. That in securing candidates for positions as interpreters the
Immigration Service should look to the large number of Chinese
students in our universities, particularly those who are here at the ex-
pense of the United States Go vernment (the Boxer indemnity money).
3. That the position of Chinese interpreter be graded into two
grades at least, as follows :
(a) Those who can interpret the spoken Chinese of one or more
dialects.
(&) Those who can in addition read the written language.
4. That the salary program outlined for inspectors be adapted to
the interpreters.
5. That a conference be arranged by the various departments of
Government who use interpreters of Chinese to work out some plan
of securing honest, capable interpreters — perhaps in cooperation with
the universities.
A STAFF ORGANIZATION AT WASHINGTON.
1. That there be established at Washington a staff organization
including at least —
(a) Another Assistant Secretary of Labor to handle Chinese ap-
peal cases, etc.
EEPOKT OF COMMISSION ON INDUSTRIAL RELATIONS. 151
(b) A central law organization providing for the continuous study
of the legal aspects of immigration.
(c) A central Chinese smuggling bureau, reenforcing district ad-
ministration in its attempt to deal with smuggling gangs and other
organized smuggling.
(d) A central agency of training and inspection, providing for the
continuous supervision and training of the men in the service.
(e) A central clearing house of information and records.
2. That it be specifically made a function of the division of super-
vision and training to keep district officers informed as to —
(a) Significant court decisions in all districts.
(b) Significant discoveries of district offices, e. g., the Japanese
(Korean) passport case.
(c) Effective methods of handling particular situations, e. g., of
commissioner who refuses to give full credence to preliminary hear-
ings before immigrant inspectors by bringing contraband China-
men immediately before commissioner.
(d) Chinese refused papers in any place.
3. That this organization should keep field officers informed as to
forward steps and other significant developments.
SALARY PLAN.
1. That the service be regarded for salary purposes as a unit rather
than as 23 individual units.
2. That the administrative officers work out a detailed plan of
graded salary increases.
3. That there be an annual increase in salary of a definite amount
for a definite number of years of service upon certification of meri-
torious service during the preceding year. On the basis of an
initial salary of $1,380, it seems to us there ought to be an annual
increase of at least $36 per year for 15 years, making a maximum
salary of $1,920. The specific amounts named are offered as sugges-
tions.
4. That positions in the service ought to be graded and correspond-
ingly higher initial salaries provided for the higher grades. The
system of annual increases, perhaps of the same amount, ought to bo
Erovided here. A larger increase for a less number of years might
e advisable. It should be provided in this connection that a man
promoted from a lower to a higher position, if he is receiving a
higher salary than the initial salary of the higher position, should
receive the next higher salary to the salary he is receiving in the
lower position. A person standing in a little house watching those
who come across an international bridge in Suspension Falls, another
doing primary inspection work or board of inquiry work at Ellis
Island, another working " under cover " among the thugs of Buffalo
and being beaten into insensibility, another doing train inspection
work — would receive no pay because of differences of duties. It is
submitted that some recognition of this difference in duties ought to
find expression in the salary schedule.
5. Superior service should be rewarded both by formal commenda-
tion and by salary increases. Two provisions might be included :
(a) The reward for a single brilliant piece of work, such as work-
ing under cover with smugglers, risking one's life, and landing the
gang in jail.
152 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
(5) The provision of a higher annual increase for men giving
continuous superior service.
REDISTRICTIXG.
1. That there be a redistricting of the United States for immigra-
tion purposes with more regard to geographical facts and to the
efficiency of the service.
2. That district offices take a periodic census in cooperation with
the State or National Census or ,both, or, if necessary, independent
of each. (This would help local offices to really see their problems.
It would acquaint them with their constituency.)
3. That this census be kept up to date and supplemented by coop-
eration with municipal and State boards of health and bureaus of
vital statistics by recording currently —
(a) Chinese births.
(b) Chinese deaths.
(c) Chinese marriages.
4. That this census be kept up to date and supplemented by making
part of the record all the examinations of Chinese in connection with
routine and other investigations. A system of cross reference cards
should be on file in Washington. It should be kept up to date and
supplemented by listing removals and advising as far as possible the
district to which the Chinaman moved.
5. That the force should be increased and the whole group of in-
spectors be organized for regular field work. This should take the
place of any system of national arrest crews.
6. That the system of rewards of conductors, trainmen, and police-
men who supply information leading to arrests of contraband Chi-
nese or smugglers, which seems now in abeyance, be revived and be
provided for in an emergency fund for each district. (Approval
of Washington perhaps should be required in each case.)
7. That a business and occupation census of each district accom-
pany the census of persons.
8. That the force of immigrant inspectors assigned to Chinese
work be increased.
9. That the equipment to be used in the work of administering the
Chinese exclusion law be adequate to cope with the smugglers.
FRANK P. WALSH.*
JOHN B. LENNON.*
JAMES O'CoNNELL.1
AUSTIN B. GARRETSON.1
1 See supplemental statement.
!
merit
life^
T^
SUPPLEMENTAL STATEMENT OF CHAIRMAN FRANK P. WALSH.
Charged by your honorable body with an investigation to discover
e underlying causes of dissatisfaction in the industrial situation,
we herewith present the following findings and conclusions, and we
urge for them the most earnest consideration, not only by the Con-
ress, but by the people of the Nation, to the end that evils which
reaten to defeat American ideals and to destroy the well-being of
e Nation may be generally recognized and effectively attacked.
WE FIND THE BASIC CAUSE OF INDUSTRIAL DISSATISFACTION TO BE LOW
WAGES ; OR, STATED IN ANOTHER WAY, THE FACT THAT THE WORKERS OF
THE NATION, THROUGH COMPULSORY A.ND OPPRESSIVE METHODS, LEGAL
AND ILLEGAL, ARE DENIED THE FULL PRODUCT OF THEIR TOIL.
We further find, that unrest among the workers in industry has
grown to proportions that already menace the social good will and
the peace of the Nation. Citizens numbering millions smart under a
Tnse of injustice and of oppression, born of the conviction that the
)portunity is denied them to acquire for themselves and their
families that degree of economic well-being necessary for the en joy -
^ of those material and spiritual satisfactions which alone make
fe worth living.
Bitterness, bred of unfilled need for sufficient food, clothing, and
shelter for themselves and their wives and children, has been further
nourished in the hearts of these millions by resentment against the
arbitrary power that enables the employer, under our present indus-
trial system, to control not only the workman's opportunity to earn
his bread, but ofttirnes, through the exercise of this power, to dictate
his social, political, and moral environments By thwarting the
human passion for liberty and the solicitude of the husband and
father for his own, modern industry has kindled a spirit in these dis-
satisfied millions that lies deeper and springs from nobler impulses
than physical need and human selfishness.
Among these millions and their leaders we have encountered a
spirit religious in its fervor and in its willingness to sacrifice for a
cause held sacred. And we earnestly submit that only in the light of
this spirit can the aggressive propaganda of the discontented be
understood and judged.
The extent and depth of industrial unrest can hardly be exag-
gerated. State and national conventions of labor organizations,
numbering many thousands of members, have cheered the names of
leaders imprisoned for participation in a campaign of violence, con-
ducted as one phase of a conflict with organized employers. Thirty
thousand workers in a single strike have followed the leadership of
men who denounced government and called for relentless warfare
on organized society. Employers from coast to coast have created
and maintained small private armies of armed men and have used
these forces to intimidate and suppress their striking employees by
153
154 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
deporting, imprisoning, assaulting, or killing their leaders. Elabo-
rate spy systems are maintained to discover and forestall the move-
ments of the enemy. The use of State troops in policing strikes has
bred a bitter hostility to the militia system among members of labor
organizations, and States have been unable to enlist wage earners
for this second line of the Nation's defense. Courts, legislatures,
and governors have been rightfully accused of serving employers to
the defeat of justice, and, while counter charges come from em-
ployers and their agents, with almost negligible exceptions it is the
wage earners who believe, assert, and prove that the very institu-
tions of their country have been perverted by the power of the em-
ployer. Prison records for labor leaders have become badges of
honor in the eyes of many of their people, and great mass meetings
throughout the Nation cheer denunciations of courts and court de-
cisions.
To the support of the militant and aggressive propaganda of or-
ganized labor has come, within recent years, a small but rapidly in-
creasing host of ministers of the gospel, college professors, writers,
journalists, and others of the professional classes, distinguished in
many instances by exceptional talent which they devote to agitation,
with no hope of material reward, and a devotion that can be ex-
plained only in the light of the fervid religious spirit which animates
the organized industrial unrest.
We find the unrest here described to be but the latest manifestation
of the age-long struggle of the race for freedom of opportunity for
every individual to live his life to its highest ends. As the nobles
of England wrung their independence from King John, and as the
tradesmen of France broke through the ring of privilege inclosing
the Three Estates, so to-day the millions who serve society in arduous
labor on the highways, and aloft on scaffoldings, and by the sides of
whirring machines, are demanding that they, too, and their children
shall enjoy all of the blessings that justify and make beautiful this
life.
The unrest of the wage earners has been augmented by recent
changes and developments in industry. Chief of these are the rapid
and universal introduction and extension of machinery of production,
by which unskilled workers may be substituted for the skilled, and
an equally rapid development of means of rapid transportation and
communication, by which private capital has been enabled to organize
in great corporations possessing enormous economic power. This
tendency toward huge corporations and large factories has been fur-
thered by the necessity of employing large sums of capital in order
to purchase and install expensive machinery, the use of which is
practicable only when production is conducted on a large scale.
Work formerly done at home or in small neighborhood shops has
been transferred to great factories where the individual worker be-
comes an impersonal element under the control of impersonal cor-
porations, without voice in determining the conditions under which
he works, and largely without interest in the success of the enterprise
or the disposal of the product. Women in increasing numbers have
followed their work from the home to the factory, and even children
have been enlisted.
Now, more than ever, the profits of great industries under central-
ized control pour into the coffers of stockholders and directors who
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 155
Iver have so muck as visited the plants, and who perform no
rvdce in return. And while vast inherited fortunes, representing
zero in social service to the credit of their possessors, automatically
treble and multiply in volume, two-thirds of those who toil from
Kto 12 hours a day receive less than enough to support themselves
nd their families in decency and comfort. From childhood to the
grave they dwell in the shadow of a fear that their only resource —
their opportunity to toil — will be taken from them, through acci-
dent, illness, the caprice of a foreman, or the fortunes of industry.
The lives of their babies are snuffed out by bad air in cheap lodgings,
and the lack of nourishment and care which they can not buy.
Fathers and husbands die or are maimed in accidents, and their
families receive a pittance, or succumb in mid-life and they receive
rthing.
And when these unfortunates seek, by the only means within reach,
better their lot by organizing to lift themselves from helplessness
some measure of collective power, with which to wring living
wages from their employers, they find too often arrayed against
them not only the massed power of capital, but every arm of the
Government that was created to enforce guaranties of equality and
justice.
We find that many entire communities exist under the arbitrary
economic control of corporation officials charged with the manage-
ment of an industry or group of industries, and we find that in such
communities political liberty does not exist, and its forms are hollow
mockeries. Give to the employer power to discharge without cause,
to grant to or withhold from thousands the opportunity to earn
bread, and the liberties of such a community lie in the hollow of the
employer's hand. Free speech, free assembly, and a free press may
be denied, as they have been denied time and again, and the employ-
er's agents may be placed in public office to do his bidding.
In larger communities where espionage becomes impossible the
wage earner who is unsupported by a collective organization may
enjoy freedom of expression outside the workshop, but there his
freedom ends. And it is a freedom more apparent than real. For
the house he lives in, the food he eats, the clothing he wears, the en-
vironment of his wife and children, and his own health and safety
are in the hands of the employer, through the arbitrary power which
he exercises in fixing his wages and working conditions.
The social responsibility for these unfortunate conditions may be
fixed with reasonable certainty. The responsibility, and such blame
as attaches thereto, can not be held to rest upon employers, since in
the maintenance of the evils of low wages, long hours, and bad
factory conditions, and in their attempts to gain control of economic
and political advantages which would promote their interests, they
have merely followed the natural bent of men involved in the
struggle of competitive industry. The responsibility for the condi-
tions which have been described above we declare rests primarily
upon the workers who, blind to their collective strength and often-
times deaf to the cries of their fellows, have suffered exploitation
and the invasion of their most sacred rights without resistance. A
large measure of responsibility must, however, attach to the great
mass of citizens who, though not directly involved in the struggle
156 REPORT OF COMMISSION OX INDUSTRIAL RELATIONS.
between capital and labor, have failed to realize that their own pros-
perity is dependent upon the welfare of all classes of the community,
and that their rights are bound up with the rights of every other
individual. But, until the workers themselves realize their respon-
sibility and utilize to the full their collective power, no action,
whether governmental or altruistic, can work any genuine and last-
ing improvement.
Fourteen years before Abraham Lincoln was called to the high
office where he immortalized his name, he uttered these great truths :
Inasmuch as most good things are produced by labor, it follows that all
such things of right belong to those whose labor has produced them. But it has
so happened in all ages of the world that some have labored and others have
without labor enjoyed a large proportion of the fruits. This is wrong and
should not continue. To secure to each laborer the whole product of his labor,
or as nearly as possible, is a worthy subject of any good Government.
With this lofty ideal for a goal, under the sublime leadership of
the deathless Lincoln, we call upon our citizenship, regardless of
politics or economic conditions, to use every means of agitation, all
avenues of education, and every department and function of the
Government, to eliminate the injustices exposed by this commission,
to the end that each laborer may " secure the whole product of his
labor."
FRANK P. WALSH.
NOTE. — Chairman Frank P. Walsh also presented the following
dissenting opinion:
Although I have signed the report prepared by Mr. Basil M.
Manly, director of research and investigation, because I believe
it represents an unassailable statement of the existing industrial sit-
uation, because it fully complies with the requirements of the act of
Congress creating the commission, and because the recommendations
are as a whole wise and necessary for the welfare of the Nation, I,
nevertheless, desire to record my dissent on the following points : ^
1. The recommendation for new administrative machinery for
mediation and arbitration in the form of a special commission. I
believe that the commission created by the Newlands Act, and the
Department of Labor, if their powers are enlarged and they are
adequately supported, will be fully able to deal with the situation.
2. The recommendations for a literacy test as a method of restrict-
ing immigration. I wish to record my opposition, as a matter of
principle, to all restrictions upon immigration.
3. The recommendations regarding civil government in such
isolated communities as coal camps, which I believe can not be ade-
quately dealt with except by the Government taking over all coal lands
and leasing them upon terms which will make possible their operation
upon a cooperative basis by the workers.
Notwithstanding many meritorious statements contained in the
report of Commissioners John R. Commons and Florence J. Harri-
jnan, I feel it my duty to dissent from the same in toto, for the
reasons following:
1. It wholly fails to comply with the law creating the commission,
in that it does not set forth the facts regarding the condition of labor
in the leading industries of the United States and the underlying
causes of industrial dissatisfaction.
|V«
S
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 157
2. The whole scheme of the control of labor, and the laws govern-
g the same, is undemocratic and not in accord with the established
rinciples of representative government.
3. The entire plan suggested is opposed to the habits, customs, and
aditions of the American people.
4. The suggestions in the main are impractical and impossible of
performance.
5. It opens up unlimited opportunities for graft and corruption.
6. If the ponderous legal machinery provided for in this report
could be put in operation throughout our Nation, it would mean —
(a) that the economic condition of the workers of the country would
absolutely subjected to the whim or caprice of an army of officials,
eputies, and Government employees, and ( b ) the establishment of an
autocratic control over the business operations of manufacturers,
merchants, and other employers, repugnant to American standards of
freedom in manufacture and commerce.
SUPPLEMENTAL STATEMENT OF COMMISSIONER AUSTIN B.
GARRETSON.
My signature is appended to the report of Mr. Basil M. Manly,
director of research and investigation of the United States Commis-
sion on Industrial Relations, submitted to the commission and trans-
mitted herewith, as to the findings of fact contained therein.
I am in general agreement with the recommendations contained in
that report except as to the formation of the system of State and
Federal commissions and a Federal industrial council.
On this recommendation I neither approve nor condemn. But out
of regard for the opinion of the great body of intrastate labor most
directly affected, I dissent.
I am also in accord with the statement of fact contained in the
report of George P. West on the Colorado situation.
I am favorable to the extension of the provisions of the Newlands
Act to all classes of interstate employees who can constitutionally be
brought under its provisions and would favor the enlargement of the
body administering it to meet the added responsibilities which would
thereby be placed upon it, but limiting the powers thereof to the
settlement of industrial disagreements and to the gathering of infor-
mation germane to their mission.
I favor the creation of State commissions, similarly constituted and
acting in corelation and understanding with the Federal board.
I heartily concur with the report of Commissioners Lennon and
O'Connell except on those points where disagreement is herein noted.
I dissent in whole from report rendered by Commissioner J. E.
Commons. I render individual opinion and suggestion only on —
CAUSES UNDERLYING INDUSTRIAL UNREST.
Any student who accepts and applies the belief that the "proper
study of mankind is man " can not fail to trace certain fundamental
causes, general in their character, which underlie industrial unrest
which will continue to grow until either the causes are peacefully
removed or revolution ensues.
To me there appear to be four of these basic causes.
The first lies in the inequitable distribution of the fruits of
industry..
Our industrial system makes it possible for one man, in only a
portion of the span of human productive life, to take unto himself
and claim as his own a fortune of a hundred millon dollars or more,
while millions of deserving men, availing themselves of every oppor-
tunity for unremitting toil, are only able to secure a grave in the
potters' field or else burden their families with an installment debt
for the cost of interment.
158
REPORT OP COMMISSION ON INDUSTRIAL RELATIONS. 159
The creation of such, colossal fortune naturally breeds in the mind
of the possessor the sentiment, belief, and practice that he is superior
to society and not subject to the law. The possession thereof makes
him unregardful of the opinions of society or of the mandates of
the law, incites him to disregard and hold himself independent of
the moral precepts and beliefs of society and tends toward the effort
to prostitute the administration of justice, and under the present
system renders him practically immune from the penalties prescribed
by the law.
The transmission to heirs or trustees, degenerate or otherwise, of
fortunes so vast or of business interests so far-reaching makes them
the virtual arbiters of the destiny of hundreds of thousands of their
fellow beings in regard to whom they have neither sympathetic
feeling, intelligent interest, nor humanitarian desire, and the testi-
mony before this commission has made it evident that in some
instances these heirs or representatives even resent the imputation
that any obligation whatever can rest upon them for the welfare of
the said fellow beings or that even intelligent knowledge as to what
would constitute well-being should be required of them.
Second, the methods of the formation and administration of law
would in themselves justify undying, righteous unrest from the fact
that they create, encourage, and demonstrate knowledge and belief
that there is no equality before the law as between the man who has
and the man who has not.
Primarily there is the trend through legislation to exalt the prop-
erty right at the expense of the personal right. Next, the tendency
of a great majority of our courts to extend and amplify this trend.
This appears in the declaring unconstitutional of a great portion of
the legislation that in later years is appearing if it in any way
restricts the rights of property, while at the same time any legisla-
tive act which tends to make effective the constitutional, personal
right of the individual is nullified upon the same ground.
In other words, to exalt money above man.
The tendency also of a large number of the same tribunals is to
legalize the maintenance of armed forces, either by the corporation
or the large individual employer, and the virtual levying of war
through the use of the State militia as a private guard for property
interests, or as an economic weapon for the purpose of prejudicing
the interests of the worker, is abetted and approved, while at the
same time rigorously prosecuting and punishing the individual for
taking any similar action, individually or collectively, in defense of
his person or his family.
Thus the man who uses a deadly weapon to protect himself or his
home against the aggression of hired thugs has set in motion against
him the whole machinery of the State, while the corporation which
enlisted, equipped, and paid a private armed force, formed and
used not for the maintenance of peace or the protection of property
but solely as an economic weapon, is lauded as a conservator of peace,
law, and order.
Our laws deal strictly and effectively with those who contribute
to the delinquency of an individual, but the hirelings of a corpora-
tion may debauch a State for their own economic gain and receive
only laudation from those who " sit in the seats of the mighty."
160 REPOET OF COMMISSION ON INDUSTRIAL RELATIONS.
The man who, on account of hunger of himself or family, steals a
loaf is held up to public view as a " horrible example " of the in-
crease of crime and decadence of the moral sense, while he who
exploits the public or by dishonest or fraudulent representation or
manipulation secures millions of their money is by the same agencies
held up to the youth of the land as an example of what intelligent
effort and devotion to business may accomplish.
The system of wholesale arrests during industrial disturbances for
acts which, committed under ordinary conditions and when no indus-
trial disturbances prevailed, would not constitute ground for arrest,
is one of the significant indications of the use of governmental
agencies, not as a preserver of peace but as a purely economic weapon.
The intrusion of what has been aptly described as " invisible gov-
ernment " into all the chanels of life — the educational system, pri-
mary, secondary, and higher, the church, the press, the legislative
branch, and the judicial system — and the recognized potency of its
meretricious efforts contributes its elements to the whole.
Third, irregularity of employment, with the consequent restriction
of opportunity and with its consequent extension of belief that unre-
mitting -toil under present conditions can bring no fair recompense,
thus stifling healthy incentive to labor, is creating an army of unem-
ployed that must, in the last analysis, be reckoned with, and unless
remedy is found whereby incentive may be restored and recompense
be made apparent, society itself must pay the forfeit.
Fourth, land monopoly with resulting prohibitive price, the great-
est influence in creating congestion in the cities, bears its own share
of the responsibility for unrest.
Tracing the history of every vanished civilization makes apparent
the fact that in every instance decadence was preceded by urban
congestion and by immense land holdings by the aristocrat or the
capitalist.
As to the remedy for these evils, an income and inheritance tax
that would be, above a certain figure, absolutely confiscatory would
make impossible, first, the creation, and, second, the transmission of
the dominating accumulation of wealth in the hands of any indi-
vidual, group, or family. When the unlimited power of reward or
purchase had ceased to exist, the subconscious tendency of legisla-
tures and of those who interpret and administer the law to be sub-
servient to property interests would of necessity disappear.
It is worth consideration as to whether or not a limitation can
properly be set upon profit in a business enterprise.
Every code, ancient and modern, prescribes penalties for usury,
and modern codes define the rate of interest permitted. Therefore,
if a man loans money, he can only demand what is described as the
legal rate for the use thereof.
Is it, or is not, equally consistent for the Government to prescribe
a rate beyond which profit shall not extend ?
In the question of dealing with land, should not the same doctrine
be applied to land that in the arid States is applied to water, i. e.,
that no more land can t>e held by an individual than he can put to
productive " use," thus making unused land revert to the State and
acquirable by tho^e who would utilize it?
A. B. GARRETSON.
SUPPLEMENTAL STATEMENT OF COMMISSIONERS JOHN B.
LENNON AND JAMES O'CONNELL.
Our signatures are appended to the report of Mr. Basil M. Manly,
director of research and investigation of the United States Commis-
sion on Industrial Relations, submitted to the commission at its
session held in Chicago during the months of July and August, 1915,
except that portion of the report recommending a system of media-
tion, conciliation, investigation, and arbitration, applicable to both
State and Nation, which proposes to create a commission of three
members, together with an advisory council of 20 members, 10 repre-
senting employers and 10 representing employees. The entire plan
is set forth in the report of the staff as submitted to the Commission
on Industrial Relations; also in a report to the commission by Prof.
George E. Barnett, and also in the report of Commissioner John R.
Commons. From these recommendations we dissent for reasons
assigned in this statement.
The evidence submitted to the commission at public hearings, to-
gether with the evidence secured by special investigators, has been
fairly set forth in Mr. Manly 's report and with even justice to all,
whether employers, employees, or the public.
CRITICISMS NOT JUSTIFIED.
Our fellow commissioners who are representatives of the employers
contend in their statement that the report of Mr. Basil M. Manly
for the staff is deficient in that it does not properly present an in-
dictment against labor on the grounds of fostering and promoting
violence in trade disputes, jurisdictional disputes accompanied by
strikes, limitation of output, sympathetic strikes, contract break-
ing, apprenticeship rules, refusal to use nonunion materials,
alleged graft, and so forth, and that it does not include these
things among the fundamental causes of industrial unrest. All
the evidence submitted to the commission, as we understand and
interpret it, proves that these things, in so far as they do exist, are
in no sense causes of industrial unrest but, on the contrary, are
evidences of existing industrial unrest and are evils that are inci-
dental to a situation wherein labor has at times been forced to fight
with such weapons as it could command for advantages and rights
that in justice should be freely accorded to the wage earners. So
long as labor organizations are forced by employers to fight for the
mere right to exist, and so long as wages paid to labor are so low
that the unorganized wrage earner often sees no choice except that be-
tween resorting to such weapons or seeing himself and his family
sink below the poverty line, just so long will these evils at times
manifest themselves as symptoms of the worker's desperation. The
union, fighting for its right to live, is sometimes forced to tolerate
38819°— 16 11* 161
162 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
acts that would not be countenanced if its entity were secure and its
energies were not absorbed in fighting for existence.
STRONG ORGANIZATIONS THE CURE.
Experience shows that the evils complained of rapidly disappear
in labor organizations as soon as the organization prevails over the
opposition of the employers and establishes its right to organize.
Strong unions mean decent wages, and decent wages raise wrage
earners to a plane of thought and action where all their acts and
mental processes must no longer be directed toward a desperate
struggle for the very right of themselves and families to live.
Organized labor fully realizes how unfortunate it is that labor in
its struggle for existence has occasionally been driven to consider its
immediate advantage at the expense of the true economic principles
that must govern in the long run. All the energies of organized
labor's representatives have been exerted to minimize or eliminate
any tendency toward limitation of output or jurisdictional disputes,
but, at the same time, organized labor insists that these tendencies
where they exist are the logical and inevitable outgrowth of evils in
industry that can be removed only by trade-union action by the
wage earners. We could cite evidence at great length to show that
the tendencies complained of, so far as they exist at all, have grown
out of the hard necessities with which labor has been confronted.
It is enough here to quote briefly from the testimony of the distin-
guished economist, Prof. Jacob H. Hollander, of Johns Hopkins
University, given before this commission in New York City on
January 20, 1915. Prof. Hollander in discussing the limitation of
output said :
We lose sight of the fact that trade-unions and unionists are not soldiering
in the matter, but they are animated by a very high degree of fraternity
in the matter, that they are willing to adopt the same principle if it is a matter
of piecework instead of time work ; that the endeavor of society should be to
bring back industrial conditions from that unwholesome mess into which they
have slumped from this abnormal disproportionate allotment of wrorkers to
particular fields in excess of the requirements in those fields. We must without
deviating one iota from the proposition which you have stated that it is socially
unsound that workmen should do less than they properly could — society should
seek to bring about conditions where they will do what they can without in-
volving displacement and unemployment on the part of their fellow workmen.
We hold that the report of Mr. Manly contains no statement that
is unworthy of credence, and that will not bear careful investigation.
The conclusions and recommendations are warranted by the state-
ment of facts and the accumulated evidence in the hands of the
commission.
THE EVIDENCE.
All evidence accumulated, whether by special investigators or at
public hearings, will be submitted to Congress, and we trust the peo-
Ele of our country will demand that it be published in full, particu-
trly the following, which are well worth the most careful study by
all persons interested in human welfare. The reports cited below
have been prepared by competent investigators and were submitted
to the commission after careful investigation and verification by
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 163
Director Basil M. Manly and by members of the commission, and are
the latest information upon the various subjects covered by them.1
Evidence Taken at All Public Hearings.
Causes of Industrial Unrest, by Mr. W. J. Lauck.
Violence in Labor Disputes, by Mr. Luke Grant.
Structural Iron Workers, by Mr. Luke Grant.
Sickness Prevention and Insurance, by Dr. B. S. Warren.
Mediation, Arbitration, and Investigation, by Prof. Geo. E. Barnett,
Conditions of Labor in Principal Industries, by Mr. Edgar
Sydenstricker.
Efficiency Systems in Industry, by Prof. Robert F. Hoxie, Mr.
John P. Frey, and Mr. Robert G. Valentine.
Industrial Education, by Commissioner John B. Lennon.
Labor Complaints and Claims, by Mr. P. A. Speek.
Trade-Union Law, by Mr. J. W. Bryan.
Colorado Situation, by Mr. George P. West.
The Telephone and Telegraph Industry, by Mr. Christopher T.
Chenery.
Labor Conditions in Porto Rico, by Mr. Christopher T. Chenery.
Labor Conditions in the Black Hills, by Mr. William P. Harvey.
Labor Conditions in Los Angeles, by Mr. William P. Harvey.
Preliminary Report on the Land Question, by Mr. Charles W,
Holman.
Agricultural Labor and Tenancy, by Mr. John L. Coulter.
Unemployment, by Mr. William M. Leiserson.
Extent and Growth of Labor Organizations, by Mr. Lee Wolman.
Injunctions in Labor Disputes, by Mr. Edwin E. Witte.
The Inferior Courts and Police of Pater son, N. J., by Mr. Red-
mond S. Brennan and Mr. Patrick F. Gill.
Chinese Exclusion, by Mr. Edward A. Fitzpatrick.
EXTENT OF UNREST.
The principal duty imposed, under the law creating the commis-
sion, was to seek to ascertain the causes of industrial unrest and offer
such recommendations as we believe might alleviate that unrest.
There can be no question but that unrest exists, in some instances, to
an alarming extent. Thousands and tens of thousands of our people
feel that they are deprived, under existing conditions in industry, of
an opportunity to secure for themselves and their families a standard
of living commensurate with the best ideals of manhood, womanhood,
and childhood. They resent the fact that the existing system of the
distribution of wealth creates at one end of our industrial scale a few
multi-millionaires and at the other end thousands and tens of
thousands of men, women, and children who are at all times in a
situation where they are uncertain as to where their next meal will
come from. Hungry, poorly clothed, and without the opportunities
that a fully rounded life requires, they become filled with a sullen
resentment that bodes no good for the future of our Republic.
We have found men and women who are inclined to ascribe this
condition to the fact that the Government exercises no power of
mandatory character to prevent strikes and lockouts. Many have
1 These reports have not been printed with this document, on the recommendation of
Chairman Frank P. Walsh, as stated in his letter in Senate Report No. 143, Sixty-fourth
Congress. The reports on Structural Iron Workers and the Colorado Situation were
printed by the commission itself in 1915.
164 EEPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
been the propositions submitted to us for compulsory arbitration or,
at least, compulsory investigation with power to recommend a settle-
ment. Some have proposed an elaborate machinery, to be set up by
the General Government, and of a similar character by the States,
providing for conciliation, mediation, arbitration, and investigation,
all of which, while without definite compulsory features, establishes a
legal machinery that must of necessity exercise an influence in that
direction.
The plan for the creation of an industrial commission, both na-
tional and State, proposes to assign to a commission of three mem-
bers the administration of all labor laws of either State or Nation,
giving to them powers far in excess of those exercised by the Presi-
dent of the United States or the governor of any State. This we
believe to be bureaucracy run mad, and a subversion of democracy
dangerous to the civil and social liberty of all citizens. We hold that
all power should be, in the final analysis, with the people, and we,
therefore, dissent from any such plan.
NEW GOVERNMENTAL MACHINERY UNWISE.
The activities of such a commission, supplemented by the proposed
advisory committees of employers and labor representatives, would
be so balanced as to prevent substantial progress and tend to per-
petuate present conditions. Such a plan conceives of labor and
capital as static forces and of the relations between them as always
to remain unchanging.
We believe that the work now being done by the Department of
•Labor in industry generally, and by the Board of Mediation and
Conciliation, dealing with interstate public utilities, is better than
any that could be expected of any additional board that has been
suggested to this commission. We believe that the Department of
Labor, with further experience and larger appropriations, will de-
velop a high state of efficiency in adjusting labor disputes that are
capable of being adjusted by anyone other than the parties directly
interested and will adequately carry on the work provided by the
law creating the Department of Labor, to wit :
SECTION 1. The purpose of the Department of Labor shall be to foster, pro-
mote, and develop the welfare of the wage earners in the United States, to
improve their working conditions, and to advance their opportunities for
profitable employment.
SEC. 8. The Secretary of Labor shall have power to act as mediator and to
appoint commissioners of conciliation in labor disputes whenever in his judg-
ment the interests of industrial peace require it to be done.
We favor the extension of the Newlands Act to cover all employees
engaged in interstate commerce, such as the railroad telegraphers,
the shop and track men employed by railroads, the employees of
express companies, of the Pullman Co., of commercial telegraph
and telephone companies, and other public utilities performing inter-
state service that, in the interest of the Nation, must be continuous.
The evidence submitted to this commission is substantially to the
effect that where trade-union organization exists among the workers,
there, at the same time, exists the least amount of industrial unrest
of a character that is dangerous to the peace and welfare of our
Nation. It is true that the union men and women are not satisfied
with their conditions; they are not, however, despondent as to the
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 165
possibility of securing better conditions ; they know what the unions
have accomplished, and they have an abiding faith that their further
desires can be attained.
Instead of any elaborate machinery for the prevention of strikes
or lockouts we are convinced, from the testimony gathered by this
commission, that the most effectual course that can be pursued to
bring about general contentment among pur people, based upon a
humane standard of living, is the promotion of labor organization.
The most casual investigator will soon discover that in those lines
of industry where organization of labor is the strongest, there is the
least danger of industrial revolt that would endanger the funda-
mental principles of our Government and the maintenance of a
nation with respect for law and order. Where organization is lack-
ing dangerous discontent is found on every hand; low wages and
long hours prevail ; exploitation in every direction is practiced ; the
people become sullen, have no regard for law or government, and are,
in reality, a latent volcano, as dangerous to society as are the vol-
canoes of nature to the landscape surrounding them.
THE ONE TRUE REMEDY.
We therefore urge as the great remedy for such unnecessary in-
dustrial unrest as we have found more, and more, and still more
organization of labor and of the employers in each industry as well.
The education of the trade unions has been conducive to a higher
and better citizenship. In recent years there have come to our assist-
ance scores and hundreds and thousands of people outside the ranks
of unionists — ministers, professors, journalists, professional men of
all kinds — who have reached the conclusion that is herein stated, that
the most efficient cure for such industrial unrest as should be cured,
is union organization.
We hold that efforts to stay the organization of labor or to restrict
the right of employees to organize should not be tolerated, but that
the opposite policy should prevail, and the organization of the trade
unions and of the employers' organizations should be promoted, not,
however, for the sole purpose of fighting each other, but for the com-
mendable purpose of collective bargaining and the establishing of
industrial good will. Organizations of employers that have no
object in view except to prevent labor having a voice in fixing the
conditions of industry under which it is employed have no excuse
for existence, as they are a bar to social tranquillity and a detriment
to the economic progress of our country. The evidence before the
commission shows that organized labor has no desire, nor has it
attempted, to control the business of the employer. It insists that
it has a right to a voice, and a potent voice, in determining the con-
ditions under which it shall work. This attitude, we are sure, will
be continued in spite of the opposition of any so-called employers'
organizations. This country is no longer a field for slavery, and
where men and women are compelled, in order that they may live,
to work under conditions in determining which they have no voice,
they are not far removed from a condition existing under feudalism
or slavery.
In emphasizing with all the force at our command the necessity of
collective action by wage earners through strong organizations, if
166 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
the problem of industrial unrest is to be solved, we wish again to
quote from testimony of Prof. Hollander. He undertook to sum
up for this commission those conclusions regarding the solution of
this problem that have been reached not only by himself, but by the
great body of economists in this country and abroad. He said :
The opinion of political economists in so far as I can voice it is
that social unrest, which is manifest not only in this country but in
every industrial country, is due to the existence of economic want or
poverty, if by that we understand not on the one hand pauperism or
on the other economic inequality. By poverty I mean the existence
of large areas of industrial society in receipt of incomes less than
enough to maintain themselves and those dependent upon them in
decent existence. We believe that is the consequence, not of any abso-
lute dearth — that the world produces enough to go around; that it
is, therefore, not a question of insufficient production, but of defects
in distribution. * * * There is a view among economists that
there is nothing in any current theory of wages that precludes the
laborer from obtaining a sufficient wage, and that if he fails it must
be in consequence of the fact that he enters into the wage contract
on a plane of inequality. The wage contract, in short, is the result
of a bargain between the employer and the employee, and if the
employer is in a superior competitive position by reason of combina-
tion and the laborer is unorganized he is at a bargaining disadvan-
tage which is certain to redound to his hurt.
I think political economists accordingly then are in agreement
that trade unionism is essential as a means of bringing the workmen
into industrial bargaining on a plane of equality.
*******
You have asked specifically what the remedy [for poverty] is. It
means a very decided revulsion of opinion as to trade unionism. The
general attitude among employers of labor is often open and decided
opposition to organized labor. Until society recognizes the unwis-
dom of that attitude and demands that the laborer must enter into
his wage bargain on a plane of competitive equality, society has not
lifted its finger to remedy that evil.
THE PUBLIC'S DUTY.
We submit the report of Mr. Basil M. Manly as our report, asking
for it the fullest possible consideration by the men and women of
our country who are interested in the social and moral uplift of
humanity.
Labor must work out its own salvation. Wageworkers can attain
that degree of well-being to which they are entitled only by their own
efforts. The general public can not be expected to do for them what
they fail to do for themselves, nor would it be desirable that those
rights and benefits to which they are entitled should be handed down
to them by the Government or by organized society as grace from
above. But the general public is vitally interested 'in the efforts of
wageworkers to win for themselves equal justice and such a degree
of material well-being as will enable them to maintain themselves
and their families in comfort, security, and health. Society's interest
in the triumph of labor's cause should spring not only from the love
of justice and the human sympathy that animates every good citizen,
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 167
but from a realization that industrial and social evils menacing large
groups of the population can not continue without eventually bring-
ing disaster to society as a whole. While inviting the aid of every
good citizen, we, as representatives of organized labor, urge that this
aid be directed not solely to seeking new legislation or new govern-
mental machinery designed as a cure-all, but to giving moral support
to labor's own efforts, and insisting that trade unions be fostered and
encouraged as the most effective agencies making for the wage-
workers' progress.
We concur in, and adopt as a part of our report, the statement
under the heading " Supplemental statement of Chairman Frank P.
Walsh."
We concur in the dissenting opinion of Chairman Frank P. Walsh
from the report of Commissioners John R. Commons and Florence J.
Harriman.
We concur in that part of the report of Commissioner Austin B.
Garretson under the heading " Causes underlying industrial unrest."
We concur in the history and statement of facts regarding the
Colorado strike, as written by Mr. George P. West, which is printed
as an addendum to this report.1
JOHN B. LENNOX.
JAMES O'CONNELL.
1 The report by Mr. George P. West has not been printed with this document, on the
recommendation of Chairman Frank P, Walsh, as it was printed by the commission .Itself
In 1915. See his letter in Senate Report No. 143, Sixty-fourth Congress.
II.
Report of Commissioners John R. Commons
and Florence J. Harriman
SIGNED BY
Commissioners Commons, Harriman, Weinstock,
Ballard, and Aishton
TOGETHER WITH
The Dissenting Opinion of Commissioner Weinstock, the Report of
Commissioners Weinstock, Ballard, and Aishton, and the
Supplemental Statement of Commissioner Ballard
REPORT OF COMMISSIONERS JOHN R. COMMONS AND FLORENCE
J. HARRIMAN.
ENACTMENT, INTERPRETATION, AND ENFORCEMENT OF LABOR
LAW.
We can not find ourselves able to agree to any of the findings or
recommendations of the staff or any resolutions based upon them,
because they have not the criticism of employers, employees, and
others affected by them, which we consider indispensable in order
that we might have before us assurance that they were accurate and
not chargeable with important omissions. These reasons are stated
more fully in paragraph 4 following, and are equally appropriate
for those who refuse to sign this report. We find ourselves unable to
agree with other recommendations and resolutions for legislation,
because they contain few or no practicable suggestions for legislation
that would be enforceable, or because they are directed to making a
few individuals scapegoats, where what is needed is serious attention
to the system that produces the demand for scapegoats, and with it
the breakdown of labor legislation in this country. In this way we
interpret the act of Congress which requires us to inquire " into the
scope, methods, and resources of existing bureaus of labor and into
possible ways of increasing their usefulness." From our personal
experience we agree with many of the alleged findings and with the
objects intended to be accomplished by the enactment of proposed
laws, but we consider that it is not worth while to propose any more
laws until we have provided methods of investigation, legislation,
and administration which can make laws enforceable. A law is
really a law only to the extent that it is enforced, and our statute
books are encumbered by laws that are conflicting, ambiguous, and
unenforceable, or partly enforced. Here is probably the greatest
cause of industrial unrest, for as soon as people lose confidence in
the making of laws by the legislature, in their interpretation by the
courts, and in their administration by officials, they take the law into
their own hands. This is now being done by both employers and em-
ployees. Before recommending any additional much-needed laws
affecting wages, hours, child and woman labor, unemployment, or
other substantive laws to improve industrial conditions, we must call
attention to the widespread breakdown of existing laws and must
devise methods of revising them and enacting and enforcing new
laws so that they will fit actual conditions and be enforceable and en-
forced. With the widespread demand for more laws to remedy wide-
spread and well-recognized causes of industrial unrest, there is a
curious feeling that, if only more laws are placed on the statute
books, they will, in some unexplained way, get themselves enforced.
171
172 KEPOET OF COMMISSION ON INDUSTRIAL RELATIONS.
While recognizing the justice of much of this demand for new laws,
we are not placing them first in our report, but rather the methods
of investigating conditions, of enacting legislation, of judicial inter-
pretation, and administrative enforcement necessary to make them
worth while as a real remedy.
Other industrial nations have gone far ahead of the United btates
in adopting labor legislation, much of which is also needed here;
but their laws are drawn up so as to be enforceable, and their machin-
ery of enforcement is such that the people are willing to entrust new
laws to their officials for enforcement. Our Government is different
from theirs and requires different methods, but, if our methods and
officials can not be made as effective and trustworthy as theirs, then
we can not trust more laws than we now have to their hands.
One of the most important facts to be recognized is that govern-
ments, whether State or Federal, can not be looked to alone for
remedying evil conditions. As soon as people come to look upon
the coercive power of government as the only means of remedying
abuses, then the struggle for control of government is substituted
for the private initiative through private associations, from which
the real substantial improvements must come. We must look for
the greatest improvement to come through the cooperation with gov-
ernment of the many voluntary organizations that have sprung up
to promote their own private interests. The most important ones,
for our purposes, are employers' associations, labor unions, and farm-
ers' organizations. These are directly affected by most labor legis-
lation, and they have much more powerful influence than have unor-
ganized interests upon legislatures and administrative officials.
Furthermore, the struggle between capital and labor must be
looked upon, so far as we can now see, as a permanent struggle no
matter what legislation is adopted. If this is not recognized, pro-
posed remedies will miss the actual facts. But there are certain
points where the interests of capital and labor are harmonious or can
be made more harmonious. In fact, this field where there is no real
conflict between employers and employees is much wider than at
first might be imagined. By recognizing these two facts of perma-
nent opposition and progressive cooperation, it may be possible to
devise methods of legislation, court interpretation, and administra-
tion which will reduce antagonism and promote cooperation. For,
while we can not look to government alone for remedying abuses,
it is only by legislation that we can give voluntary organizations a
greater share in working out their own remedies and in cooperating
with government toward increasing the points of harmony.
Some progress has been made in this direction in the past few years
in some States, through the enactment of laws creating industrial
commissions, but none of these laws go to the full extent required in
order to carry out the foregoing principles. By observing the
strong and weak points of these laws, as well as those of other States
and the Federal Government which have not adopted similar laws,
we can draw certain conclusions, which we do in the form of recom-
mendations. A draft of a bill embodying most of these recommenda-
tions was submitted to the legislatures of Colorado and New York
during the legislative sessions of 1915 and wTas adopted with more
or less serious modifications and additions by those legislatures. The
I
I
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 173
recommendations below contain most of the terms of the foregoing
draft and also of improvements which seem essential to be made in
the industrial commission laws of the States and of proposed laws
for State or Federal Governments. Some of the recommendations
are based on personal experience in the administration of labor laws.
INDUSTRIAL COMMISSIONS.
1. State and Federal industrial commissions to be created for the
administration of all labor laws. All bureaus or divisions dealing
with conditions of labor, including industrial safety and sanitation,
workmen's compensation, employment offices, child labor, industrial
education, statistics, immigration, and so on, to be placed under the
direction of the commission. Each commission to consist of three
commissioners to be appointed by the governor or President, as the
case may be, with the consent of the Senate. Members to be ap-
pointed with the advice of the advisory representative council.
(See par. 2.) The term of each commissioner to be six years, except
that the terms of the commissioners first appointed shall be so ar-
ranged that no two shall expire at the same time. The Federal
Department of Labor to be retained for educational and political pur-
poses, and a similar department might be created in large industrial
States, such as New York and Pennsylvania.
The tendency of labor legislation in the States which have given
attention to this matter has been toward a complete centralization of
the administration of the labor laws in the hands of a single depart-
ment. Wisconsin in 1911 established an industrial commission for
the administration of all labor laws, and Ohio, after one year of
separate administration of the compensation law, created in 1913 a
similar commission, and incorporated the compensation commission
into an industrial commission. In New York and Pennsylvania the
responsibility for the administration of labor laws has been divided
between a commissioner of labor, who is responsible for their en-
forcement, and an industrial board of five members, the sole duty of
which is to make necessary rules and regulations having the force of
law. In New York there has also been a separate commission for the
administration of the compensation act. The tendency, however, is
strongly toward the industrial commission plan, as the New York
Elan, which was devised at the time of the reorganization of the
ibor department of that State in 1913 and adopted in the same year
by Pennsylvania in an act largely copied from the New York law,
has already (1915) been given up in the State of its origin. The
New York commission under the law of 1915 consists of five members,
and is charged with the administration of all labor laws and the
workmen's compensation law, and also with the duty of making the
rules and regulations for carrying these laws into effect. In Penn-
sylvania a compensation act has this year (1915) been enacted, and,
while no change has been made in the organization of the labor de-
partment, the administration of the compensation act has been in-
trusted to that department.
During the present year (1915) at least five States have enacted
legislation for a closer union of the administration of their labor and
compensation laws. Colorado, with serious modifications, and In-
diana have enacted laws creating industrial commissions similar to
174 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
those of Wisconsin and Ohio. Nevada has created an industrial
commission of three members for the administration of its com-
pensation act and has conferred upon one of the commissioners, to
be designated as commissioner of labor, the duty of enforcing all
laws of the State for the protection of the working classes. In New
Jersey, after an unsuccessful attempt to create an industrial com-
mission, provision has been made for two additional employees in
the department of labor for the purpose of correlating the work of
that department with the administration of the compensation act.
In California the industrial accident commission administers the
compensation act and also laws dealing with safety in places of em-
ployment, although the labor bureau also has the latter authority;
and in Massachusetts, while there are still separate boards in charge
of the labor department and of the administration of the compensa-
tion law, the two boards sit jointly for the purpose of making rules
and regulations for the prevention of industrial accidents and occu-
pational diseases.
In several States bills have been introduced for the creation of an
industrial commission for the administration of all such laws. In
New Jersey such a bill was introduced by the president of the State
Federation of Labor, who is also a member of the assembly, and in
Maryland such a bill was prepared and introduced at the instance of
the State labor department. In Illinois the report of the efficiency
and economy committee recommended the consolidation of the vari-
ous departments dealing with labor laws, including the board admin-
istering the compensation act, and in Missouri a legislative com-
mittee, after a careful study of the subject, reported in December,
1914, in favor of the enactment of a compensation law and the crea-
tion of an industrial commission to administer both it and the other
labor laws of the State. This latter report is particularly impor-
tant, because it represents the result of a recent official study of the
problem and consideration of the experience of the States which
have advanced labor laws.
As already explained, the fundamental principle of these recom-
mendations is that the administration of all the labor laws of a State
shall be centralized. An illustration of the advantages is found in
uniting the administration of the labor laws relating to safe and
sanitary conditions of employment with the administration of the
workmen's compensation laws.
It is probably unnecessary at this stage of the development of
workmen's compensation legislation to consider the question whether
there should be a responsible officer or officers charged with the ad-
ministration of such laws, 01* whether their administration should
be left to individual initiative and the final determination of courts
of law, already burdened with many other and equally important
responsibilities. That question is settled, and the only point is as to
the character of the administrative agency. Both the nature of the
compensation laws and the experience which has been gained during
their operation in many States point to a board or commission, in-
stead of the courts, as the best form of administration. Economy of
administration then is secured if the administration of safety laws is
placed in the hands of the compensation commission. Fewer highly
paid executive officers and other employees are required, and there
I
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 175
is secured avoidance of duplication in the work itself. For example,
it is essential to the administration of both these laws that em-
ployers should be required to make reports of accidents. On the
one hand they furnish necessary information respecting the na-
ture of accidents and the possibilities of prevention; on the other,
they are necessary in the actuarial work involved in the administra-
tion of compensation. The same is true of the inspections which are
frequently necessary in the course of the administration of both laws
and in most instances one inspection would serve both purposes.
Furthermore, the information derived from hearings in compensa-
tion is of great assistance to the commissioners, who are also charged
with responsibility of the labor laws generally, in giving them a
broader view of the problems with which they are dealing.
The same kind of events that have led up to the State industrial
commission are taking place in Federal legislation. Already two
bills on workmen's compensation have been well advanced and one
of them creates a commission separate from the Department of La-
bor. The bill for compensation of employees of the Government
(63d Cong., 2d sess., H. R. 15222) takes the place of the present law
administered by the Department of Labor, and provides for a
"United States Employees' Compensation Commission" consisting
of three commissioners, no one of whom shall hold any other Federal
office or position. The other (63d Cong., 1st sess., S. 959), providing
for employees of private employers in interstate commerce, leaves
the administration of the law to the courts, a method that has been
effectually discredited. Whether either or both bills on workmen's
compensation are adopted, they should be united, as already shown
in the case of the States, under a commission that administers the
safety laws.
When the Department of Labor was created the important work
of safety for mine workers was left in the Department of Interior
under the Bureau of Mines. Safety on railroads is in the hands of
the Interstate Commerce Commission. The Bureau of Standards, of
the Department of Commerce, develops safety standards for electric
and other equipment. The Public Health Service, of the Treasury
Department, investigates industrial diseases and factory sanitation.
The Bureau of Labor Statistics, of the Department of Labor, in-
vestigates and publishes bulletins on accidents and diseases in va-
rious industries. Lately a bill has passed the House providing for
a safety bureau in the Department of Labor, with power to investi-
gate any or all of the matters of safety now carried on either in that
department or in any other department. The seamen's law re-
cently enacted is in the hands of the Department of Commerce, as-
sisted by the Department of Labor. The Department of Agriculture
has a division on rural housing and social conditions.
This overlapping of jurisdiction in matters of industrial safety
and sanitation has grown up without any plan, according to the
accident of such officials as happened to be on the ground or to get
a hearing in Congress; or on account of objection to placing authority
in one department or another. And now, with the prospect of Fed-
eral legislation for compensation for accidents and occupational
diseases, one or two more bureaus are likely to be created, wdth their
most important object the prevention of accidents.
176 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
At the same time three great private associations have sprung up
which are doing as much or more for safety than all the State and
Federal Governments combined. The Conference Board of National
Allied Safety Organizations, composed of representatives from the
National Association of Manufacturers, the National Founders' As-
sociation, the National Metal Trades Association, and the National
Electric Light Association, has begun the standardization of safety
devices for millions of employees, regardless of any standards which
State or Government officials may set up.
The National Council of Safety, composed of the safety experts of
most of the large corporations of the country and of representatives
of labor, has developed an extensive campaign of accident prevention.
The Workmen's Compensation Service Bureau, supported by the lia-
bility-insurance companies, is doing expert work of the highest
order in safety devices and processes for the assistance of such
employers as are policy holders in those companies.
With these three national organizations representing the employ-
ing interests, with at least five, and the prospect of seven, bureaus
representing the Federal Government, and with similar agencies more
or less developed in the States, all of them working on the same prob-
lem of compensation for accidents and prevention of accidents, the
time is ripening for some kind of correlation and uniformity. It
can not be expected that Congress and the people will long be satis-
fied with this expensive and wasteful disorganization of the national
energies that are directed to the great work of safety and compen-
sation. Just as the States are moving toward centralization under
industrial commissions, so the same problem must force the Federal
Government toward not only centralization of its own work but cor-
relation with the States and with private organizations.
It does not follow that all of the Federal bureaus dealing with
safety and health should be bodily taken from their several depart-
ments and transferred to an industrial commission. There may be cases
where their work on industrial safety and health is tied up with their
other work. It is only necessary that the several departments should
be required by law to discontinue any overlapping or conflict of
jurisdiction, and that an industrial commission should have authority
to bring them all together into a national council of industrial safety
and health and require them to agree on a definite plan of dividing
up the work and cooperating with each other and with private asso-
ciations organized for similar work. Other comments will be found
under paragraph 3.
ADVISORY REPRESENTATIVE COUNCIL.
2. An advisory representative council consisting of the Secretary
of Commerce and the Secretary of Labor and of, say, 10 employers
(including farmers) and 10 representatives of labor unions (includ-
ing women). The representatives on the council to be selected from
lists, not including lawyers, submitted by recognized employers' asso-
ciations in the State or in the Nation, as the case may be, such, for
example, as State associations of manufacturers, the National Metal
Trades Association, the National Founders' Association, associations
of coal operators, of railroad presidents, of brewers, of farmers'
I
REPORT OF COMMISSION OX INDUSTRIAL RELATIONS. 177
organizations, etc. The representatives of employees to be selected
from lists submitted by the American Federation of Labor, the rail-
road brotherhood, the Women's Trade Union League, and independent
organizations. In all cases either the associations entitled to repre-
sentation should be named in the law, or provision should be made
rhereby the governor or President, upon investigation, shall name
rgaiiizations which are considered representative by organized em-
ployer's and organized employees themselves and permit them to name
their representatives. Similar provision in case an organization
ceases to exist or to be representative. Any organization to be entitled
to recall its representative on notice. The representative council
to be appointed by the governor or the President before the appoint-
ment of the commission and the governor or the President to call it
together and to consult with it regarding the names proposed to be
nominated for commissioners. The Industrial Commission to invite
also a limited number, say, 10, of individuals or representatives of
organizations including persons especially interested in unorganized
labor arid representatives of such organizations as the International
Association for Labor Legislation, the National Child Labor Com-
mittee, and the Consumers' League and individual employers and
employees, as may be advisable for their assistance, to be members
of the advisory council. The council to take no vote on any subject
except procedure and to have no veto on any act of the Industrial
Commission. Nominal compensation or no compensation to members,
with necessary expenses. The representative council to effect its
own organization and call meetings independent of the commission,
to be provided with a secretary and needed clerical assistance, to hold
meetings perhaps quarterly and on call, to keep and publish records
of its proceedings. The Industrial Commission to be required to
submit all proposed rules, regulations, and publications to the repre-
sentative council, allowing sufficient time for examination and dis-
cussion, and to publish any protest or criticism filed by any member
of the council, along with the commission's own publication.
This recommendation is an extension of a principle which is left-
optional in several State commission laws, but the mandatory feature
has been partially adopted by law in New York. The recommenda-
tion creates a body similar to the Superior Councils of Labor in
France, Belgium, and Italy, the Industrial Council in England, and
many councils of private representative citizens wTho assist Govern-
ment officials in Germany. In Wisconsin the appointment of a
council is optional with the commission, but it has been appointed
for several purposes, and this policy has been demonstrated to be the
most effective of all that the commission has adopted. The omission
by that commission to adopt it at times has been a source of severe
and just criticism, and accounts for the granting of permits against
which objections are rightly made. In New York the representa-
tive council is mandatory, but the selections are made by the gov-
ernor, and are therefore liable to be political and nonrepresentative.
For these reasons it is recommended that the council not only be
mandatory, as in New York, but that no action of the commission,
except in case of specified emergencies, shall be valid and no pub-
lication shall be issued unless previously submitted to the representa-
tive council. In this respect -the advisory representative council
38819°— 16 12
178 REPORT OE COMMISSION ON INDUSTRIAL RELATIONS.
would have powers in excess of those of similar councils, except per-
haps the Superior Council of Belgium.
Appointment by the governor, President, or Industrial Commis-
sion is required in order that members may receive necessary ex-
penses. Lawyers are excluded because the council should be com-
posed of persons with practical experience in industry.
The history of governmental commissions and departments has
often been the appointment of men on the recommendation of poli-
ticians or special interests or the accident of personal acquaintance.
An executive, in looking around for competent appointees, is often
at a disadvantage because he can not get impartial and disinterested
men to accept, or because he does not have impartial and competent
advice in his selections. To the proposed Industrial Commissions
is given the most serious problem before the American people. Al-
most everything turns on the kind of men appointed. They must
be men not only competent but having the respect of the great op-
posing interests. Their position is that of a kind of mediator as
well as of administrator. Such appointments should not be made
in haste, nor in the secret of the executive's accidental advisors.
They should be considered publicly, and especially by the opposing
interests whose fortunes will be committed in great part to their
hands. The governor or President can not, of course, be bound by
the action of the council, but he can be required to get their advice
on names proposed.
It is intended that the members of the commission itself should
not be representative of either employers or employees, but that they
should have the confidence of both sides. This is expected to follow
from the requirement that the governor or President should consult
the council before making his nominations of commissioners. In
this way, what is known as "the public" would be represented in
part by the commission, while capital and labor would be represented
in the council.
By this method it can be expected that capable men may be at-
tracted from their private occupations into public service as mem-
bers of the commission. Usually the kind of men required for such
positions dread the political and personal attacks that are connected
with public office. But it would be difficult for an eminent man to
resist the call to public office when he has the united invitation of
the President, the employers, and the labor unions of the country.
The representative council has no veto power, but is intended
merely as a cooperative body representing employers, employees, the
public as it is represented by the Secretaries of Commerce and Labor,
and individuals selected by the commission. Its duties are purely
advisory. Its purpose is not only to give the governor or President
and the commission the benefit of advice and to bring together for
conference representative labor men and employees, but to guarantee
as far as possible that all appointments (par. 3), all investigations
and publications (par. 4), all rules and regulations (par. 5), and
other acts of the commission, shall, before they are published or be-
come valid, be under the continuous supervision of the recognized
leaders of organized capital and organized labor, and public repre-
sentatives.
No requirement is made for the appointment of advisory experts,
such as lawyers, engineers, and physicians. These may be appointed
I
REPORT OP COMMISSION ON INDUSTRIAL RELATIONS. 179
by the Industrial Commission as members of the third interest on
the council, but it is found in practice that the services of consulting
experts are secured without expense to the State if representative
employers and employees have a part in the advisory council. This
is attended to because the employer and employee representatives
themselves have not the technical knowledge and can not give the
time necessary to consider all details, but must consult experts in
whom they have confidence. This they do, and are thereby prepared
to discuss intelligently the acts of the commission. The council and
the commission can, of course, call in such experts to thefr con-
ferences at any time.
The employer and employee members of the advisory council
should be strictly representative and responsible to the organizations
represented. For this reason the organizations and not the Govern-
ment should pay the salaries of the members. The result as shown in
Wisconsin, where not even expenses are paid, is that the represen-
tatives are usually business agents of the unions and large employers
selected by the employers' associations.
The council should organize with its own officers, independent of-
the commission, but should hold its conferences with members of the
commission or with members of the staff. It should appoint expert
advisory committees as needed for different subjects, such as safety,
employment offices, etc. It should be provided with clerical and
other help from the staff of the commission.
Since the powers of the council are only advisory it is not essential
that it should vote on any questions except procedure. Hence it is
not necessary to have equal representation of any interests or full
attendance at all meetings. Each member should be furnished by
mail with all proposals and proposed publications of the industrial
commission.
For the reasons just cited it is not necessary that the commission
itself should consist of more than three members. They are not
expected in the larger States or in the Federal Government to attend
to details of administration. Their duties will be mainly those of
consultation and conferences with the council, supervision of the
executive heads of divisions (par. 3), and public hearings.
. This advisory council provides effective publicity for every act of
the commission. The ordinary publicity required by law is that of a
public hearing, and is limited to rules and regulations which are to
have the effect of law. Such public hearings have become mere legal
formalities, at which usually lawyers appear for each side and little
or no opportunity is given for the two sides to get together on points
where they can agree. The commission then retires and issues such
rules and regulations as it may choose. These formal public hearings -
are not even required by law in some cases, but (par. 5) the recom-
mendation provides that before the public hearing the employers
and employees, with the commission and its staff, shall have con-
sidered and drafted the proposed rules so that when it comes to the
public hearing they are present to explain and defend them. If
objections are raised at the public hearing the proposed rules are
referred back to the advisory council and the staff of the commission
for reconsideration before being finally approved and issued as the
legal act of the commission. If no public hearing is required by law,
rules can not be issued except on advice of the representative council.
180 REPORT OF .COMMISSION OK INDUSTRIAL RELATIONS.
In this way an effective publicity is secured by a thorough considera-
tion of the rules, because both those who are to be compelled by law to
obey the rules and those in whose interest they are issued have
assisted in drafting them.
Additional comments will be found under paragraph 3.
CIVIL SERVICE AND COMMENTS ON PRECEDING PARAGRAPHS.
3. The commission to appoint a secretary, bureau chiefs, or chiefs
of divisions, and such other employees as may be necessary, all of
them to be under civil-service rules. Provision to be made for the
advisory representative council or a committee named by it, repre-
senting both employers and employees, to assist the civil service com-
mission in conducting examinations, except for clerical positions,
and making it mandatory 011 the civil service commission to appoint
these representatives on its examining boards. Members of advisory
council while serving on such boards to receive extra compensation.
If there is no civil service commission in the State, then the advisory
council shall cooperate with the industrial commission in the exami-
nations. The commission afterwards to make its appointments from
the eligible list of those who pass the examinations. A graded system
of salaries and promotions to be adopted, by which the members of
the staff may rise to the position of heads of bureaus or divisions,
where they would receive salaries equivalent, if necessary, to those
received by the commissioners. Any proposed removal of subordi-
nates to be brought before the advisory council before action.
Many of the features of this section are adopted in the New York
act, but the examination by employers and employees is not manda-
tory on the Civil Service Commission, and a few of the chief posi-
tions are exempt from civil-service, rules. The Civil Service and
Industrial Commissions of Wisconsin have practiced this method of
examination and appointment for employment offices and for chiefs
of divisions, although not required by law.
Objection sometimes is made to civil-service examinations as being
impractical and theoretical. Indeed, civil-service examinations are
likely to be impractical if conducted by experts. These objections
can be avoided in the examinations for these positions by requiring
that the Civil Service Commission, if there is one, shall cooperate
with the representative council. The examinations would thus be
conducted with the aid of men thoroughly acquainted with all the
practical difficulties involved in the duties of the positions to be filled.
By making use of oral or written, assembled or nonassembled, com-
petitive or noncompetitive examinations, as best suited to the partic-
ular purposes, it should be possible to obtain all the advantages of
the civil-service system with few of its disadvantages.
Furthermore, it is not enough that examinations for positions
under the Industrial Commission should secure efficiency and per-
manency; it is even more important that they should secure impar-
tiality. The Industrial Commission itself and its entire staff are
looked upon as mediators in adjusting the administration of labor
laws to the actual conditions of industry. It is essential that both
sides should have confidence in the staff of the commission, and there-
fore that both sides should have a voice in its selection.
REPORT OF COMMISSION OX INDUSTRIAL RELATIONS. 181
This provision for representatives of employers and employees on
examining boards should not be left optional with Civil Service Com-
missions or the Industrial Commission, but should be mandatory.
It has been found that several Civil Service Commissions object to
this provision, because they wish to retain unqualified authority for
conducting examinations and making up eligible lists. This is one
of the features of bureaucracy which should not be permitted where
such vital issues as the contest between capital and labor are at stake.
The provision in the recommendation does not prevent Civil Service
Commissions from appointing experts on their examining boards;
it merely requires them also to appoint, in addition, the recognized
representatives of the interests who have previously been nominated
by the interests themselves.
At the present time secretaries and bureau chiefs in the Federal
Government are exempt from civil-service rules, and are usually
appointed by the President and confirmed by the Senate. This is a
serious discouragement to competent subordinates, who are thereby
prevented from rising by promotion to the higher positions in their
bureaus, and who see less competent political appointees brought in
over their heads as well as frequently changed.
These recommendations are intended to place the highest positions
under the Industrial Commission on an equivalent with the com-
missioners themselves. It would be unfortunate and impracticable,
except in smaller States, if the commissioners were required to give
their entire time to the details of administration. This is the case
where a commission must perform as many functions as are required
in the large State and Federal Government commissions. This they
would be compelled to do if their chiefs of divisions were frequently
changed, as under the present system. The chiefs of divisions and
bureaus, both under Federal and under State commissions, should
be as competent as the commissioners to deal with employers and em-
ployees, and much more competent in dealing with subordinates. In
foreign countries the office of factory inspector, as well as all other
offices dealing with the relations of employers and employees, are
considered as professions. In some of those countries the universities
provide training courses and lectures on the subjects for which the
officials are preparing, and these are required to be taken as a part
of the civil-service rules. The appointee then serves as an appren-
tice in the department and by promotion may reach the highest po-
sition. As a result a high grade of inspector is obtained. Only when
the officers and employees of the commissions have such opportunities
as these for a life work, provided they are impartial as between em-
ployers and employees, can officials be interested in preparing them-
selves for the work, or academies like those at West Point and
Annapolis be adopted for the training of civil servants.
The advisory representative council, proposed in paragraph 2,
also protects the administration of labor laws from the just fear of
government by a bureaucracy. There must be officials if labor laws
are to be enforced. The courts can not be relied upon alone, because
prosecution can be begun only by private individuals. Consequently
administrative officers and inspectors have been provided to initiate
prosecutions. These officials constitute a necessary bureaucracy, if
the laws are enforced. But it can not be asserted that the present
182 REPORT OF COMMISSION ON" INDUSTRIAL RELATIONS.
system of political appointments of inspectors avoids the evil of
bureaucracy. The essential evil of bureaucracy is not so-called per-
manency of tenure, but the refusal of the official to take advice from
laymen. The loudest agitator against bureaucracy becomes at once
the most confirmed bureaucrat when he gets into office, because he
determines to run his office in his own way, regardless of the advice
of those who are compelled to obey his orders. In this sense the
American officeholder is much more of a bureaucrat than are the
European officials, who are compelled to consult the superior councils
of labor or industrial councils of representatives of interests. It is
for this reason that the legislatures and Congress should make it
mandatory that the representative advisory councils should be
created and that the industrial commissions and their staffs should
confer with them before any act of the commission can have the
validity of law. It is also necessary that the Civil Service Com-
mission should appoint representatives from the council on its
examining boards before any valid eligible list for appointment of
subordinates can be made.
Another charge against civil-service rilles is the objection to per-
manency of tenure and the inability to get rid of an official who
adheres to outworn methods. This objection often has force, but the
remedy is not that of returning to political and partisan appoint-
ments or frequent removals when changes occur in the political
branch of Government. Officials, under most civil-service laws, can
be removed at any time, provided reasons be given and no civil
service commission should have authority to reinstate any official, as
is the mistaken policy of some States. Permanency of tenure means
only permanency on "good behavior." The principal reason why
officials adhere to old methods is because there is no continuous
supervising authority in a position to force them into new and better
methods. The provision for an advisory council with which the
officials are compelled to confer has been found to be the most effec-
tive method of compelling such officials to keep up with the changing
conditions that require new methods. If, then, they are obstructive
or incompetent to do this, there is good cause for removal.
COMMISSIONS AND CLASS CONFLICTS.
There are, of course, criticisms and objections raised against indus-
trial and other commissions. It is not claimed here that they always
work well. But they work better than the system they have dis-
placed, and they have been found to be the only alternative where
legislation attempts to regulate the relations of great conflicting and
hostile interests. Many States and Congress have been forced by
actual conditions to create railroad and interstate commerce com-
missions in order to take the details of the contest between railroads
and shippers as far as possible out of the legislatures and the courts.
Congress has been compelled, after 25 years of futile antitrust
legislation, to turn over the contest between trusts and their com-
petitors or customers, to a Federal trade commission. The contest
between^ban kers and the commercial and business classes that depend
on credit for their existence has been turned over to the Federal
Reserve Board.
EEPOBT OF COMMISSION ON INDUSTRIAL RELATIONS. 183
The contest between capital and labor is more serious than any
of the other contests. Since the year 1877 it has frequently resulted
practically in civil war, with the army or militia called in to sup-
press one side or the other, according to the will of the executive.
It is claimed by some that this contest is irrepressible and will end
in revolution, and at least it is plain, when the military power is
called upon to decide a contest, that the ordinary machinery of
government, which is fairly successful in other contests, has broken
down.
It is not a solution of the contest to claim that these outbreaks
are caused solely by agitators and have no foundation in conditions
that need remedying. Such a solution, carried to its limit, means
the suppression of free speech, free press, and free assembly, which
can be accomplished only by military power. That there are con-
ditions which need remedying is shown by the enormous amount of
labor legislation of the past three decades, and the enormous amount
cf new legislation proposed. This legislation has come from the
free discussion and investigation of actual labor conditions, and if
there is no effective way for this discussion to be carried on and the
alleged facts to be verified or disproved, then the result must be an
excess of unfounded and impractical agitation mixed up with real
grievances. There are unbridled agitators of this kind on both sides
of the contest, and it is only when the two sides are brought together,
and their charges, countercharges, and alleged grievances are boiled
down by investigation to the residuum of facts, that mere unfounded
agitation can be expected to give way to deliberations on remedies for
recognized evils.
This does not mean that both sides can be made to agree on
remedies for all evils and grievances, even after they have agreed
on the facts. It means only that there is found to be a much larger
field than was supposed where they can agree, and it is worth while
for legislation to provide the means for bringing both sides together
for a continuous search after the common points of agreement. When
they have agreed upon and disposed of less disputatious points, they
are in a position to go on to those disputed points which had been
thought irreconcilable. This is the main reason for creating Indus-
trial Commissions with adequate powers of impartial investigation,
with conferences and discussions by both sides, and with power to
decide on regulations and then to enforce them. (Par. 5.)
While some of the functions outlined for the proposed Industrial
Commission are now being performed by the Department of Labor
through its bureaus, it is not proposed that the department be
abolished. (Par. 1.) It is even proposed that in large industrial
States a similar department might be created in addition to the In-
dustrial Commission. In nonindustrial States, where the labor de-
partment is mainly educational and not administrative, there would,
of course, be no occasion for an Industrial Commission. Such occa-
sion would usually first arise in case a workmen's compensation law
were enacted.
We take it to be commonly accepted that a department, with its
head having a seat in the Cabinet, is chiefly designed to advise and
aid the administration in formulating its policy toward the interests
in charge of that department, and to foster and promote the welfare
184 JKKPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
of those interests. To be sure, other responsibilities are intrusted
to the department, but the foregoing are its prime duties.
That Congress intended it to be so is manifested in the statutes
creating the different departments. Thus the law establishing the
Department of Commerce declares that it should foster, promote, and
develop the foreign and domestic commerce, the mining, manufac-
turing, shipping, and fishery industries, and the transportation facili-
ties of the United States. Likewise in creating the Department of
Labor in 1885, Congress stated its purpose to be the diffusion of
" useful information on subjects connected with labor, in the most
general and comprehensive sense of that word, arid especially upon
its relation to capital, the hours of labor, the earnings of laboring
men and women, and the means of promoting their material, social,
intellectual, and moral prosperity." Congress reiterated its position
when it raised the Department of Labor to Cabinet rank in declar-
ing that its purpose should be "to foster, promote, and develop the
welfare of the wage earners of the United States, to improve their
working conditions, and to advance their opportunities for profitable
employment." It is also mandatory upon the Secretary "to make
such special investigations and reports as he may be required to do
by the President, or by Congress, or which he himself may deem
necessary."
Congress has not only declared that it regards Cabinet officers or
department heads as the personal choice of the President, whom
they are to assist in formulating his executive policy, but it has also
accepted it in practice. This is illustrated by the fact that the Senate,
even when controlled by an opposition party, usually ratifies the
President's nominations promptly and without objections.
When influential economic groups feel that the Government can be
of assistance in promoting their interests, they set about to bring
political pressure to bear upon Congress to create a department
that will concern itself with their welfare. Thus the Department
of Agriculture was created in 1880, largely through the efforts of
the National Grange and other farmers' organizations. In the same
way the Department of Commerce was created on the petition of the
business and manufacturing interests.
Of course, the different departments have also been intrusted with
administrative duties. The Department of Agriculture administers
the meat-inspection service, the Department of Commerce the steam-
ship-inspection service, the Department of Labor the immigration
service, and so on. However, whenever an acute administrative
problem arises, owing to an intense conflict between two opposing
economic interests, and requiring a disinterested enforcement of law,
it has usually not been intrusted to one of these political depart-
ments. Hence, when Congress turned its attention to the dispute
between the railroads and the great majority of shippers, it did not
create a Department of Commerce to administer the law, but instead
intrusted it to the Interstate Commerce Commission, a disinterested
and nonpolitical body. Again, when Congress determined upon
legislation to deal with " the new economic problem involved in the
increased tendency toward concentrated ownership of the large in-
dustries of the country," no one even thought of suggesting that this
mutter be turned over to the Department of Commerce. On the con-
trary, without a single objection, an independent administrative com-
I
I
REPORT OF COMMISSION OX INDUSTRIAL RELATIONS. 185
mission, the Federal Trade Commission, was created to enforce the
legislation. The same is true with the Federal Reserve Board. Con-
gress has also applied this policy to the labor problem. The first
important administrative act directly affecting capital and labor was
not assigned to the Department of Labor for execution, but to a dis-
interested and nonpolitical board. We refer to the Newlands Act of
1913, and preceding acts relating to arbitration of labor disputes on
railroads. When an effort was made to place the administration of
this act under the Department of Labor, both the railroad companies
and the railroad brotherhoods opposed and prevented the change.
We are of the opinion that if, in dealing with the labor problem,
this policy is carried out consistently, considerable of the industrial
unrest will be allayed. We believe that it should be the conscious
policy of Congress to separate the policy-determining functions from
the administrative functions. The Department of Labor should be
intrusted with investigations that would aid the President and his
administration in determining upon a labor policy. It should also
be the educational medium through which the country is to be in-
formed on the various labor issues that need solution or have not yet
been legislated upon. As a matter of fact, this has been the depart-
ment's chief and most effective activity. A glance at the list. of pub-
lications of the department shows the influence it has had as a pioneer
in labor legislation in this country. The present unanimity of
opinion in favor of workmen's compensation, safety and sanitation,
vocational training and employment bureaus, is largely due to its
having concentrated upon educating the public to the need of such
legislation. And the department wisely continues to fulfill its chief
mission by pointing the way to future improvement of the conditions
of labor. Its recent publications aim to enlighten and crystallize
public opinion on such mooted but vital questions as sickness and unem-
ployment insurance, old-age pensions, housing of workingmen, coopera-
tion, employers' welfare work, home and factory conditions of women
and children. To make its work still more effective the department
has begun issuing a monthly review which will supply information
on all questions affecting labor. We have no doubt that with the aid
of the Department of Labor, legislation upon these subjects will be
secured sooner than otherwise.
On the other hand, when public opinion, through legislation, has
determined upon a policy, it is vital to its success that it be adminis-
tered by disinterested persons not connected with a political depart-
ment. This is necessary in order to obtain the mutual and voluntary
cooperation of employers and employees, and, unless they are assured
of a disinterested administration of the law, they will be reluctant to
assist in its successful enforcement. Naturally a department which
initiates and advocates new legislation is bound to antagonize those
who are not in accord with its views. It is futile to expect the De-
partment of Labor to get the good will and cooperation of those
whom it successfully defeated in the legislative battle. We must re-
member that the department is constantly advocating new legislation,
even while it is administering that which has been enacted. Thus
the bitter feeling against it is bound to be permanently at high pitch,
and those who differ from it would likely have no confidence in its
being able to administer the law disinterestedly. Then, too, as we
shall show, if a law is administered through a political department,
186 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
its efficient administration may be subordinated to political ex-
pediency.
It is in order to avoid these difficulties that we recommend the
method already adopted in several States. We believe that an
Industrial Commission, removed from the heat of political con-
troversy, created with the safeguards proposed herein, would have
the confidence of employers and employees. Although employers
and employees may have hopelessly divergent opinions on policy, yet
when the policy is once determined upon by Congress they are equally
concerned in its efficient and disinterested administration. If assured
of this, they cooperate in its successful enforcement.
Furthermore, much opposition to labor legislation, both by capital
and labor, is based upon the fear that its administration will be
partial. And even when such legislation is enacted, unless both sides
have confidence in the disinterestedness of the administrators, it is
doomed to remain a dead letter on the statute books.
In recommending that tl^e policy-determining function be sepa-
rated from the administrative function, we wish to separate, as much
as possible, the problems upon which capital and labor disagree from
those in which they have a common interest. Legislation is a matter
of opinion. Men may honestly differ as to the wisdom of a certain
law. Difference of opinion when strongly contested invariably en-
genders suspicion and distrust. Hence, if an Industrial Commission
were called upon to initiate and advocate new legislation it would
be forced to antagonize and lose the good will of either capital or
labor, or of both. Such an outcome must inevitably hamper its ad-
ministrative duties, which it can not carry out successfully unless it
has the confidence of both sides.
But it is highly essential that the conditions of labor be constantly
improved and adjusted to new industrial developments. This func-
tion of studying and promulgating the best policies for promoting
the welfare of labor should be left to the Department of Labor, as
originally intended when created. The future interest of our country
demands that a department devote itself exclusively to the further-
ance of the welfare of labor. New problems must constantly be
studied, information furnished, and remedies suggested. Consider-
ing that in the final analysis public opinion, as expressed through
legislation, determines the nature of the remedy, it is proper that a
political department be intrusted with the duty of aiding in deter-
mining that policy. It is with this idea in mind that we make the
distinction between the enactment of law which is political in its
nature and must be fought out in the Congress and in the Cabinet
and the administration law which is nonpolitical and should be ad-
ministered by disinterested parties in cooperation with representa-
tives of capital and labor.
The conclusion is that all subjects upon which Congress has not
legislated so as to require an administrative department should be in
the hands of the Department of Labor. Among these are the impor-
tant subjects of sickness insurance, invalidity insurance, unemploy-
ment insurance, old-age pensions, occupational disease, child and
woman labor, and so on. The department should make studies of
comparative administration of labor law and the administration of
laws in the States. Other subjects might be mentioned. In fact
there should be no limitation on its field of investigation and the
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 187
education of the public to the- evils which labor suffers and the reme-
dies that should be adopted.
The Industrial Commission is purely an administrative body not
intended to promote new legislation, except where it is needed in
connection with its administration of existing laws. Other new
legislation gets its initiative elsewhere. The proper place for oppos-
ing interests to make their fight on new laws is in the State legisla-
tures and in Congress. Each side necessarily endeavors to elect its
representatives, to employ its lobby, and to use every honorable
method in its power to defeat the other side. The outcome is usually
a compromise not wholly satisfactory to either. But it does not
follow that the fight should be kept up in. the administration of the
laws that are enacted. Whatever they are, they should be enforced
exactly as they stand, and neither side should control the executive
and administrative officers. These should be impartial. It is because
executive officials are mainly partisans that the administration of
labor laws in this country has broken down. They may be appointed
by political parties, but back of the politicians are the employers or
the trade-unions that make secret or open deals with the politicians
in order to control the offices. It can not be expected that employers
will readily accept investigation or obey the orders of officials whom
they know or suspect to be agents of unions or of politicians, intent
on strengthening unionism or making political capital out of their
positions. It is natural that employers should protect themselves
either by getting their own agents into the positions or by getting a
weak and inefficient trade-unionist appointed. In any case the laws
are not enforced, and the laboring classes in turn become desperate
and defiant of Government. An illustration is found in the recent
industrial troubles in Colorado. Probably no State of its size in
the Union has had upon its statute books more labor laws than Colo-
rado, nor more trade-union representatives in office to enforce them,
yet the nonenforcement of the labor laws was undoubtedly one of the
contributing causes of the recent troubles. The history of many
other States is similar, so far as nonenforcement is concerned. Labor
representatives alternate with employer representatives or with
labor politicians, who make a show of enforcing the laws while the
masses of labor get no substantial benefit.
American experience has shown that this situation can be met only
by a nonpartisan commission, removed as far as possible from poli-
tics. In other countries, and in British colonies having parliamen-
tary forms of government, this kind of separate commission is not
required, for the good reason that the Cabinet officer who enforces the
labor laws is a member of Parliament, and Parliament must be dis-
solved and a new election ordered if the Cabinet loses control. Hav-
ing a seat on the floor of the legislature he must answer questions
put by the opposition. If one of his subordinates is inefficient or
takes sides against employers or unions, some one in Parliament is
liable to rise and demand explanations, and the Cabinet minister is
compelled to explain and to stand by the subordinate or to repudiate
him. The opposition may even be able to defeat the ministry and
get a new election. Consequently, Cabinet officers are responsible to
Parliament, and, although they are partisans and politicians, they
are careful that their subordinates, who actually administer the laws,
shall be impartial and efficient. In no other country, governed by a
188 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
parliament, would such important boards as the Interstate Com-
merce Commission, the Federal Trade Commission, the Federal
Reserve Board, or the State railroad and public utility commissions,
be taken out from under the jurisdiction of a responsible cabinet
minister. In this country it is found necessary to make them wholly
or partly independent, because there is no officer directly responsible
to the legislature or the people who can be given control over them.
The same is true of the labor departments of parliamentary coun-
tries compared with such departments in the American State and
Federal Governments. The issues in this country are too vital and
menacing, they are too easily turned into political capital, and, at
the same time, the politicians in charge are too little responsible to
the legislatures, to Congress, and to the voters, for the American
people to leave them in the hands of partisan or political officials.
The plan of an industrial commission with a representative council
as herein recommended, is based on American experience and fitted
to American conditions in dealing with such issues of opposing
interests.
But the commissions created to deal with the relations between
other opposing interests can not be accepted as models for dealing
with the opposing interests of capital and labor. The Interstate
Commerce Commission was designed to reconcile the opposing in-
terests of railroads and shippers, the Federal Trade Commission of
monopolies and competitors, the Federal Reserve Board of bankers
and borrowers, but in none of these ca-ses were the opposing interests
strongly organized for aggression and occasional paralysis of busi-
ness verging on civil war. It was not so necessary then that the
opposing sides should be strongly represented, as is recommended in
the creation of the Advisory Representative Council. This council is
a kind of parliament designed to hold the commission continuously
to the impartial performance of its duties and the accuracy of inves-
tigations upon which the impartial performance of duties depends.
The Industrial Commission, as here proposed, adopts methods in
the field of labor laws similar to those that collective bargaining
between unions and emphwers adopts in drawing up voluntary joint
agreements. Modern trade agreements are, in fact, almost complete
codes of labor law for a particular industry, and, if voluntary col-
lective bargaining could become universal and effective for all em-
ployers and employees, then the State or Government might not need
to enact many labor laws. Something like this is actually attempted
in those countries having compulsory arbitration. They provide
easy methods for organizing and perpetuating unions of employers
and unions of employees. They try to induce the representatives
of these unions voluntarily to recognize each other, to get together
to investigate grievances and demands, to confer and to draw up and
enforce a joint agreement covering all alleged evils and grievances.
If they can not succeed in doing this they provide a court of arbitra-
tion with substantially all the powers that the conferees of the unions
and employers would have, if they acted without compulsion.
But compulsory arbitration is too remote to be considered, or even
anything which would logically lead to compulsory arbitration. In
paragraph 14 we recommend voluntary collective bargaining with
the Government acting only as mediator without any compulsory
powers. Our alternative proposed for compulsory arbitration is in
fa
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 189
part an industrial commission with a council of employers and
employees.
The need of an industrial commission becomes more pressing in
proportion as new laws are enacted and new executive duties are
added. It was the introduction of workmen's compensation that
forced attention to the situation. Here is a new type of legislation
which is so evidently a matter in which employers are as much con-
cerned as employees that it was not considered proper to intrust its
administration to a department controlled solely in the interests of
labor. Consequently separate commissions were created independent
of the labor bureau, or else the compensation law was put in charge
f the courts.
-But the most important effect of the compensation laws is not the
compensation to workmen, for no law pretends to pay the workman
anything for his suffering nor even to pay him his total loss in wages.
The most important effect is the universal pressure on employers to
prevent accidents and to heal the injury as soon as possible.
Wherever this object of the law was understood either the work
of factory inspection for accident prevention was taken from the
labor bureau or the compensation commission and the labor bureau
were consolidated. One reason for doing this is that employers have
become as much interested in accident prevention as have workmen,
for it becomes a matter of business and profits. Another reason is
that the compensation commission itself may not be tempted to exalt
the less important object of compensation over the more important
one of accident prevention and speedy cure.
The employers now become just as much concerned as the employ-
ees in having an efficient factory inspection. They must do their
own inspection, anyhow, for the sake of reducing tlie costs of com-
pensation, and they do not need to be prosecuted as they did before.
What they need in factory inspection is the help of inspectors who
are expert in showing them how to prevent accidents and how to
organize safety committees and to get the "safety habit" into their
employees. Whatever reason may formerly have existed for trade-
unions to get their members appointed as factory inspectors in order
to drive home prosecutions no longer exists. Neither do employ-
ers any longer have reason for using political or underhanded
methods in order to get weak and inefficient inspectors appointed.
Employers now wish to cooperate with factory inspectors, and the
only kind they can cooperate with are those who are impartial and
efficient. The fact that employers have taken the lead in their three
great safety organizations mentioned under paragraph 1, instead of
being led by State and Federal labor officials, shows unmistakably
the need of enlisting employers in at least this branch of labor law.
Another subject, unemployment, the most serious and distressing
of all, is almost universally agreed as needing a comprehensive plan
of employment offices. It is now generally admitted that it must be
dealt with by the Federal Government. Both England and Germany
have national systems of public employment offices. The English
system is operated directly by the National Government; the German
system is operated by the city and State governments correlated
and supervised by the Federal Government. A combination of both
methods will, perhaps, be necessary in this country. Bills have al-
190 EEPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
ready been introduced in Congress, and the Department of Labor
has begun the establishment of offices. But, in the contest between
employers and trade-unions, the control of employment offices is
essential to either side. The antiunion employers' associations already
have sufficient employment offices, and many local trade-unions have
employment agencies of their own.
Employers control the jobs. They hire whom they please. Surely
they can" not be expected to hire workmen sent to them by trade-
unionists or politicians who happen to run the public employment
offices. This accounts for the inefficiency of the offices in almost
every place where they have been tried. They sink to the level of
charity, finding occasional short jobs for casuals, but do not become
the great labor exchanges which they should be as the first step in
dealing with the most serious of all problems, unemployment. Ex-
perience shows that employers must have confidence in the ability
and impartiality of the officials who run the employment offices or
they will not patronize them. On the other hand, trade-unionists
must have confidence that the offices will not be used to furnish
strike breakers. The only effective solution of this predicament is
the management of these offices by joint committees of organized em-
ployers and organized employees and their joint civil-service exami-
nation of the officials who run the offices. Under the Industrial Com-
mission plan there are not only representative councils at the na-
tional headquarters, but similar councils for each State and for each
local office.
Furthermore, no Federal legislation is more urgent than the su-
pervision of private commercial offices doing an interstate business.
If this country expects to promote public offices and to regulate pri-
vate offices, the only effective way is through joint control by the
acknowledged representatives of organized employers and employees,
cooperating with a Federal commission that is impartial and non-
political.
The subject of industrial education is vital to the Nation as a
whole and immediately critical for both employers and employees.
Yet, when a bill is introduced in Congress for national aid to in-
dustrial education, the administration is not placed under the De-
partment of Labor, where it would naturally belong and where more
has been done than in all other departments in the investigation of
the subject. It is proposed to place the administration under an ex
officio board of cabinet officers with an officer of the Bureau of Edu-
cation acting as executive. Furthermore, no standards of efficiency
are imposed upon the States as a condition of receiving the funds
appropriated out of the Federal Treasury. (Par. 17.) This bill com-
bines the features of political control, " pork-barrel " finance, and ex-
clusion of the two great interests of employers and employees who
are most directly concerned. The reasons for such recommendations
are the popular demand for industrial education, and the lack of
any effective method of bringing together the representatives of em-
ployers (including farmers) and employees. Such representatives
are the ones who know the needs of industry and agriculture and are
competent, with the aid of qualified educators, provided neither side
dominates the other, to set up the standards of efficient industrial
training which should be made the essential condition of receiving
Federal aid. For this purpose the Industrial Commission should
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 191
add to its advisory council representatives of organizations of edu-
cators, such as the National Education Association, and the Na-
tional Society for Promotion of Industrial Education. The Federal
Industrial Commission, upon the advice of such a council, includ-
ing employers, employees, farmers, and educators, could then de-
termine the standards as a basis for receiving subsidies, which
should probably require the States to provide governing boards of
employers, employees, farmers, and educators, continuation day
schools with compulsory attendance on the employer's time, adequate
training of teachers with practical industrial experience, and so on.
In making the preceding three recommendations no reflection is
intended on any particular State or Federal official now charged
with the administration of labor laws. It is conceded, that many of
them may be doing the best work possible under existing laws. But
it is recognized that the conditions under which they work make it
impossible either to administer existing laws effectively or to assume
the administration of additional laws urgently required to meet the
increasingly difficult and complex problems of capital and labor.
Instead of interfering with the commendable work of trade-unions
the recommendations are intended to strengthen unionism at its
weakest point. One of the most serious obstacles in the way of a
harmonious labor movement is the struggle of ambitious unionists
to get the indorsement and control of their unions for political posi-
tions. The conflicts within unions for such indorsement and support
are notorious in weakening the unions. Furthermore, in order to get
and hold a political position the unionist must make alliance or
connivance with and concessions to the leaders of political parties,
and therefore is not free to support consistently the demands of
labor. He must also often support or even appoint other politicians
whose influence is used against the unions. This unquestionably
weakens or destroys the confidence of laborers generally in the in-
tegrity and faithfulness of all their leaders who accept political posi-
tions, or are suspected of trying to get such positions. It is only
when the union representative is paid from his union treasury in-
stead of the public treasury, and is recalled by his union, that he is
truly representative and the union itself has a sound basis for per-
manency and growth.
Our recommendations adopt this principle and counteract this
weakness of unionism by making their representatives on the ad-
visory council dependent solely on the unions. They receive no
salaries from the public treasury, and can be recalled at any time
when they cease to be representative. The result is that the unions
usually nominate for such positions their regular officers or business
agents who receive salaries from the union treasury for other pur-
poses. Under such circumstances there can ordinarily be no question
of the union representatives " selling out " to employers or politicians.
INVESTIGATIONS.
4. The Industrial Commissions to make and publish investigations
and recommendations on all subjects whose administration is in-
trusted to them. Investigations and recommendations on other sub-
jects to be made only on the request of the legislature, Congress, or
the court. (Pars. 12, 13.) Since it is provided (par. 14) that the
192 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
Federal and State commissions shall cooperate in the mediation of
labor disputes, the Federal commission should be the agency to
which the States should look for continuous investigations and pub-
lications for the entire country of wages, hours of labor, cost of
living, joint trade agreements, and all subjects involved in labor dis-
putes, but the names of establishments or individuals should be kept
confidential. It should publish, at least annually, a report on all
strikes, lockouts, boycotts, blacklists, that have terminated during the
year, but should not make such investigations during an industrial
dispute unless consented to by both parties in the manner elsewhere
provided. (Par. 14.) In making such reports it should give all
material facts, including demands, negotiations, picketing, strike-
breakers, conciliation, the acts of State or Federal authorities, as
well as joint agreements reached with or without cessation of busi-
ness. In preparing these reports the commission should not call upon
any mediator, but should, if necessary, use its powers of compulsory
testimony.
In order to assist State minimum-wage commissions in the most
difficult part of their work the Federal commission should also in-
vestigate and report upon interstate competition and the effect of
minimum-wage laws. Such investigations are of assistance also in
determining other questions. State commissions should make reports
on safety, compensation for accidents, minimum- wage investigations,
employment offices, child labor, etc.
No publication of any investigations to be made or any rules (par.
5) to be issued without previously submitting them to all members of
the representative advisory council, with opportunity for criticism,
the latter to be published by the commission with its own report.
All forms, schedules, and instructions for investigators likewise to
be submitted to the advisory council.
These recommendations regarding investigations are the most im-
portant of all the recommendations regarding the Industrial Com-
mission. All of the other recommendations culminate in the validity
of its investigations. Investigations furnish the basis for drafting
laws by the legislature, for formulating rules and regulations by the
commission (par. 5), for interpretation of laws and rules by the
courts, and for prosecutions in enforcing the laws. The recommenda-
tions for an industrial commission, for an advisory council, for civil-
service appointments, for subsidies (par. IT), and for court proce-
dure (par. 7) are all directed toward securing reliability and confi-
dence^ in the investigations and conclusions of the commission.
It is required that all investigations and proposed publications
shall be submitted to the representative council before they are issued
and time enough given for consideration and criticism. If, then, any
rules are issued (par. 5) or investigations published without the
approval of either side, their validity and accuracy are at once con-
demned and the commission is discredited. Under a partisan or
political department of labor, it is unlikely that statistics and inves-
tigations are accepted, either by the public or by both employers and
employees, at their face value. Nothing more serious can exist, in a
country which depends so much on public opinion, than this distrust
of official publications and statistics which purport to give all the
facts upon which public opinion forms its conclusions. Employers,
REPORT OF COMMISSION OX INDUSTRIAL RELATIONS. 193
.mployees, and the general public should be able to rely implicitly
for their conclusions on official statistics on wages, hours of labor,
health, safety, cost of living, unemployment, costs of production, dis-
tribution of wealth, strikes, boycotts, and all other material facts
bearing on the relations of capital and labor. All labor legislation,
all administration of labor lawrs, all efforts at mediation and arbitra-
tion, all recommendations of public bodies, go back for their justi-
fication to statistics and investigations. The money of the Govern-
ment is worse than wasted, and the officials are discredited if there
remains any interested body of citizens who do not place confidence
in these official statistics and investigations. The temptation is so
great, in view of the struggle between capital and labor, to distort
or suppress or obliterate facts that no precautions top great can be
taken to secure thorough criticism, verification, and filling in of omis-
sions before the facts are published. No matter whatever else may
be recommended, no recommendation can be depended upon that
does not provide fully for the integrity, reliability, and complete
inclusion of all material facts in every publication of official statis-
tics and investigations. There is no certain method of doing this
except in the recommendation that all alleged facts of statistics and
investigations be submitted to the parties directly interested and
affected by the conclusions. The proposed advisory council, composed
of acknowledged representatives of these parties, acting independ-
ently, without intimidation or connivance, and watchful against
any advantage attempted by the opposing yet cooperating interest,
consulting their constituents on any matter, can be trusted to see to
it that no material facts or conclusions are published without con-
clusive proof and none suppressed without disproof. If any member
of the council objects to any final statement or conclusion, he is enti-
tled within limits to have his protest published along with the report
of the commission. In fact, the entire spirit of these recommenda-
tions is the utilization by Government of the organizations that have
both common and hostile interests, in order to protect the Govern-
ment itself against partisanship and partiality in dealing with the
serious conflict between those interests. It is because the reports,
findings, and recommendations of the present commission were not
submitted to parties affected thereby or to an advisory committee
similar to the one proposed for a permanent commission that we can
not accept them as verified or criticized, so that we could have before
us when finally acting upon them any criticisms or assurance that
their statements were accurate or that important omissions had not
been made. An advisory committee to this commission, similar to
the one proposed, was approved for a short time and, after making
changes in the proposals of the staff having the measures in charge,
made certain unanimous recommendations as bills to this commis-
sion, but the committee was discontinued before it could complete its
work. No staff of investigators, however careful, can be expected
to have such complete knowledge of their subject as to be trusted
without the scrutiny and criticism of the interests or persons affected
by their reports. Whenever a permanent industrial commission is
created there can be no provision more essential than that of provid-
ing the representative machinery for reliable investigations, find-
ings, and publicity.
38819°— 16 13
194 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
An illustration of the method of supervision of investigation here
advocated is afforded by the Interstate Commerce Commission. The
statistics of wages and hours collected by that commission are of
importance in matters of mediation. They were so collected and
arranged that they could not be relied upon for that purpose. Con-
sequently a conference was called, consisting of the railway account-
ants, the railroad brotherhoods and other labor organizations, the
statisticians of the commission and of the Department of Labor, to
consider the statistics. After the discussion, which failed in some
respects to reach agreement, the Interstate Commerce Commission
issued new rules changing several features of the statistics in order
to avoid the criticisms advanced, the changes to go into effect in 1915.
It is this method of statistical investigation that is recommended to
be made mandatory on Industrial Commissions.
The Industrial Commissions herein recommended are modeled in
part upon the example of the railroad and public utilities commis-
sions, the Interstate Commerce Commission, the Federal Trade Com-
mission, and the Federal Reserve Board. Their powers are partly
legislative, partly judicial, and partly executive. That which is most
important is their, power of making investigations of facts and condi-
tions and then issuing orders (par. 5) based on such investigations.
The legislature or Congress lays down a general policy or standard,
but does not go into all of the minor details and variations that are
needed to fit the policy to actual conditions. In the case of rail-
roads it gives up the attempt to enact a schedule of freight and
passenger rates and merely requires of railroad corporations that
all rates and services shall be reasonable, that there shall be no
discriminations, and so on. The commission then investigates
each case as it comes up and issues a detailed order intended
to carry out the policy and enforce the standard laid down by
the legislature or Congress. In the case of labor law the legisla-
tive standards differ according to the object of the law. In matters
of safety the legislature requires employers to keep their work places
safe, and leaves to the commission the investigation of conditions
and of safety devices necessary to be installed in each industry or
shop, with power to order them installed. In compensation for ac-
cidents the legislature requires the employer to pay 50 per cent or
more of the wages lost for a certain time, and then gives the com-
mission power to investigate each case if necessary, and to determine
exactly the amount arid all details, and to order the employer to
pay that amount. Other standards may be set up by the legislature,
if it wishes to do so, for hours of labor, minimum wages, exclusion
of women and children from dangerous employment, regulation of
private employment offices, and so on, covering the entire field of
labor legislation.
It is evident that the legislature can not itself make all of these
investigations. It must depend upon others. In practice, too, the
legislature and Congress are not willing to delegate to a single execu-
tive official the power of issuing rules and orders. This power is
quasi judicial. Consequently the legislature and Congress create
commissions with three or more members, in order to require delib-
eration and a fair representation and hearing for all interests that
are benefited by or compelled to obey the rules. A single executive
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 195
official is liable to be one-sided and partisan, or to act without delib-
eration, or to be frequently changed, but a commission can be organ-
ized so as to be impartial, deliberative, and continuous.
In the administration of all other labor laws, such as those on in-
dustrial education, child labor, hours of labor, minimum wage, and
so on, there are points of antagonism and points of harmony between
capital and labor. The points of antagonism are enlarged and ex-
aggerated when one side or the other, through practical politicians,
controls the offices. The points of harmony can only be discovered
by investigation, and the investigations must be cooperative between
employers and unions, else neither side will have confidence in the
results. The Industrial Commission and its subordinate officials, of
course, have to be depended on to make the actual investigations,
but the provision in the foregoing recommendation, that all matters
and all proposed publications shall be submitted to the advisory
council, representing the opposing interests, for their advice and
criticism but not their veto, goes as far as practicable toward secur-
ing that the investigations, conclusions, and rules of the commission
and its subordinates will have the confidence of both sides.
The particular recommendation regarding investigations of labor
disputes is associated with a later recommendation regarding media-
tion. (Par. 14.) While recommending voluntary mediation, it is
recognized that strikes and lockouts are of such public importance
that the public is entitled to accurate information regarding their
causes and continuance. In connection with its other investigations
the investigation of strikes and lockouts shows underlying causes of
industrial unrest and the failure of legislation or administration to
remedy them. Official investigations and reports on those subjects
have not as a rule been accepted, because they have been colorless
for fear of giving offense, or because they are conducted under the
direction of partisans of one side or the other. It is expected that
investigations conducted under the supervision of the advisory
council will avoid the defects of many official investigations.
All investigations of a general character, such as those on safety
devices, wrages, hours, conditions of labor, and interstate competition,
should be made by the Federal commission, relieving the State com-
missions or bureaus for their work of local investigations, administra-
tion, and inspection, the Federal commission to be the central
standardizing agency, leaving the State free to adopt or reject the
standards. (Par. if.) The investigation of interstate competition
and the effect of minimum wage laws will be of use in the most
difficult part of the work of State minimum wage commissions, which
we indorse in so far as women and children are concerned.
RULES AND REGULATIONS.
5. The commission to make rules and regulations for carrying into
effect the provisions of the labor laws which it enforces. This may
be done by providing, in the industrial commission law or otherAvise,
for certain brief standards as may be determined by the legislature,
for example, that all places of employment shall be safe and sanitary,
as the nature of the industry will reasonably permit, that no person
shall be allowed to work for such hours of labor or at such times as
196 REPOBT OF COMMISSION OX INDUSTRIAL RELATIONS.
are dangerous to his or her life, health, safety, or welfare, that em-
ployment offices shall give correct information, shall not split fees,
and so on. Or, less preferably, the existing labor laws may be re-
tained or new ones enacted in minute detail, and the Industrial Com-
mission may be given power merely to make such additional rules
and regulations or variations from the laws as are necessary to give
them full effect. Rules to be submitted to the advisory council before
issuing.
The method of brief legislative standards above mentioned is
adopted by most of the States having Industrial Commissions and it
is here recommended, but the latter is the method adopted in New
York. The original policy of American labor legislation involved
an attempt to cover in detail every contingency which might arise.
This method has proved itself impractical. It is impossible for a
legislature charged with so many other duties and having but little
time for attention to any of them, to intelligently provide in detail
for such matters as the safeguarding of machinery or the regulation
of hours of labor and periods of rest in hundreds of different em-
ployments and. under hundreds of different circumstances. Legisla-
tion upon these subjects has to-day reached the stage long ago
reached by legislation relating to public health and public utilities.
The legislature can provide only the general standards and must
leave to administrative officers the duty of " filling in details."
Whether the labor laws of a State consist onty of a few sections,
as in Wisconsin, or are a bulky law, as in New York, there still exists
the necessity for the further filling in of details, and if the labor laws
enacted by the legislature are at all lengthy, as in New York, there
exists the additional necessity of some means for variations in deserv-
ing cases, either by express* provision of the law or, in the absence
thereof, by the tacit overlooking of violations by the officials charged
with the administration. This latter practice is an opportunity for
graft or favoritism. A factory inspector goes into an establishment
and has the power to order changes amounting to several thousand
dollars. He finds many points where the strict letter of the law does
not apply. Since he is the only person who actually interprets the
law on the ground he can readily overlook violations. But where the
laws do not go into details, but an Industrial Commission determines
the details in the form of rules fitted to conditions, the inspector no
longer has discretion in overlooking violations. He must report all
the violations, and the employer has another remedy besides influ-
encing the inspector. He can go to the commission with a petition
that a different rule be made to apply to his case, and the commission,
after a public hearing, may grant or reject the petition, or modify its
rule for that particular establishment. Variations must be made in
any case. The difference is, that where there is no commission with
power to make rules, the variations are made in secret by the different
inspectors, while where the commission has this power they are made
in public. (Par. 6.)
In the recommendations above, the briefest kind of a legislative
standard is indicated. Whatever its length, however, the best method
of filling in the details is the same. It is not unconstitutional to del-
egate such power to a single individual, but it is undesirable and, as
already pointed out. impracticable to confer it upon one person. The
REPORT OF COMMISSION OX INDUSTRIAL RELATIONS. 197
alternative is to confer it upon a board or commission. The chief
question arising here is whether a board shall be created especially
for this purpose or whether one board shall perform this duty to-
gether with that of administering the laws and the rules and regula-
tions made by it. The latter is the Industrial Commission recom-
mended. The other method has been tried in the two greatest indus-
trial States in the Union, New York and Pennsylvania, but the
former State abandoned it after a two-j^ears' trial. In New York it
was adopted two years ago when the factory investigating commis-
sion declined to take the administration of the labor department away
from a single executive, but adopted a compromise through establish-
ing an industrial board of four members, together with the labor
commissioner as chairman, to perform the rule-making function
whether in the form of general rules or variations. While the board
has done much good work, there remains little doubt that the same
work can be performed even more intelligently and. effectively by a
commission which is also actively engaged in administrative work.
In both cases, the aid of committees representing particular industries
or interests has been and must be largely relied upon. On the other
hand, an industrial board such as formerly existed in New York, and
still exists in Pennsylvania, the rule-making duties of which are
solely legislative in their nature, without power of enforcement, is
not much better equipped to make such rules and regulations than
the legislature, except that its number is smaller and its personnel
chosen particularly for this one duty.
The recommendations provide different methods of securing uni-
formity of State and Federal legislation on various subjects (pars.
17, 18). This uniformity has been secured in the case of railroads
by exactly the same method as the one here proposed to be made man-
datory. When Congress enacted a law requiring safety couplings
there were a large number of manufacturers of couplings in the mar-
ket. Congress gave authority to the Interstate Commerce Commis-
sion to decide on the kind of couplings that wTould accomplish the
object of securing safety. The commission called in the representa-
tives of the railroads and of the railroad brotherhoods, with the
manufacturers of couplings, and after several conferences the present
standards were adopted. Other standards applying to railroad cars
were also adopted in this way.
At the present time there is urgent need for Federal aid in secur-
ing uniformity of safety devices. This can be done to a certain
extent through voluntary cooperation with the States. Various States
with industrial commissions are going ahead with their own stand-
ards, and there is apparently no means of securing uniformity until
a Federal commission is given power to act. This could be done if
the Federal commission Drought together representatives of State
factory inspectors, along with its advisory council of employers and
employees, and the private national safety organizations mentioned
under paragraph 2. B}7 agreeing on standards, these could be
adopted by every State commission which has power to make rules.
And the Federal commission would be merely a central standardiz-
ing agency, leaving to the States the voluntary adoption of the stand-
ards. If it were desired to go further, a Federal law granting to the
Federal Industrial Commission power to set standards for interstate
198 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
shipment of machinery not equipped with the standard safety devices
might be adopted. Each method would require a Federal commission
to set standards.
The illustration regarding safety is taken not because that is the
most important problem, but as furnishing an illustration of possible
methods applicable in other lilies. Similar uniformity might be
secured in the regulation of private employment offices and other
lines of labor legislation, as the States or Congress may determine.
Of course, if the Congress enacted legislation similar to the Palmer-
Owen child-labor bill, the extreme step would be taken of attempt-
ing to force States to come up to Federal standards. This may be
necessary in some cases, but the Federal Industrial Commission
affords methods of securing uniformity in some branches of legisla-
tion by less extreme measures.
The courts have generally denied the contention that this delega-
tion of power to make rules and issue orders is unconstitutional as a
delegation of legislative or judicial power, and the Supreme Court
of the United States has used the term " administrative " to describe
those powers which are partly legislative or judicial, but are not so
exclusively one or the other that they may not be properly conferred
upon an executive or administrative body. ( See Interstate Commerce
Commission v. Humboldt S. S. Co., 224 IT. S., 474; Pennsylvania
Kailway Co. v. International Coal Mining Co., 230 U. S., 184; Mitch-
ell Coal & Coke Co. v. Pennsylvania Railway Co., 230 U. S., 274.)
REVIEW BY COMMISSION.
6. Any person in interest to be entitled to petition the commission
for a hearing on the legality or reasonableness of any rule or regu-
lation or of any order directing compliance with any provisions of
law or other rule or regulation or for a special order applicable to
a single establishment. The commission may change its rule or regu-
lation before final decision by a court on its legality.
This recommendation is embodied in one form or another in all of
the State commission laws. Under the prevailing system of adminis-
tering labor laws a person affected by an order enforcing an act of
the legislature has no opportunity to object to its constitutionality,
reasonableness, or validity except by awaiting prosecution and sub-
mitting his objection as a matter of defense. Not only is this cum-
bersome and undesirable as a matter of procedure, but it is open to a
very serious objection that it brings this matter up often for final
decision by a petty court, or even before a local magistrate or justice
of the peace.
Not only does a provision of the sort here recommended give the
person affected opportunity to make proper objections, but it gives
the commission an opportunity to reconsider its rules and orders
from the point of view of their actual application in concrete cases
before they are subjected to tests in the courts. Questions arising in
the application of rules and orders to concrete cases frequently de-
pend upon facts and conditions which are difficult to bring out
accurately and thoroughly in the courts. The proceedings before the
commission will develop the facts and conditions which are alleged
to justify the provision and those which the employer depends upon
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 199
defeat it better than could be done in any court. It is frequently
necessary for the court to have such facts available in order to ar-
rive at a proper decision upon the constitutionality of such a rule
or order, and in the absence of such a proceeding as this, an appellate
court has practically no means of obtaining such information. This
could not be better illustrated than in the recent decision of the New
York Court of Appeals (People v. Schweinler Press, 2M N. Y., 395),
upholding the constitutionality of the section of the labor law pro-
hibiting night work for women, and, in effect, overruling its own
decision of eight years previous, holding a similar provision un-
constitutional. In the opinion of the recent case the court frankly
says that its previous decision was due to a lack of proof at that
time that the prohibition bore some direct relation to the public
health and welfare, and that subsequently such proof had been
gathered and was of such a nature as to warrant a different de-
cision. In this case the evidence had been gathered largely through
the efforts of a special factory investigating commission, but the
whole incident illustrates the necessity for a thorough consideration
of all facts involved before the matter is taken into the courts, and
making the results of such consideration available for the use of the
courts.
The special order applicable to a single establishment is necessary
in order to take into account peculiar conditions, which, if rigidly
applied, might render the entire law or general rule unconstitutional.
COURT REVIEW.
7. Any person in interest to be entitled to bring a special action
in court to test the legality and reasonableness of any provision of
the labor laws, of any rules and regulations made thereunder, or of
any order directing compliance therewith. (It is probably advis-
able, in the case of State commissions, to limit the jurisdiction of
such cases to a court sitting at the State capitol.) Actions involv-
ing rules and regulations and orders not to be brought until final
determination of the petitions for review (par. 6) by the commis-
sion. Provision also to be made for suspending prosecutions pend-
ing determination of petitions or actions for review in court. Mat-
ters of fact which had not been before the commission to be referred
back to the commission and opportunity given for the commission
to change its rules or regulations before final decision by the court.
Rules and regulations of the commission to be made prima facie
reasonable in all court proceedings.
This recommendation is provided for in different ways in the dif-
ferent State commission laws. The purpose of these provisions, to-
gether with those relating to review by the commission (par. 6), is
to secure a uniform interpretation of the labor laws and the rules
and regulations for carrying them into effect ; to prevent their being
held unconstitutional by petty courts (which often results, on ac-
count of the impossibility of appealing such a decision, in an abso-
lute bar to further enforcement of such provisions in that locality,
even though the provisions may eventually be upheld by a higher
court) ; and to protect the commission from ill-considered action by
higher courts not having before them sufficient information to enable
them to arrive at an intelligent decision.
200 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
TESTIMONY.
8. The commission to have the incidental powers such as those of
subpoenaing and examining witnesses and administering oaths, and
so on, necessary for the full performance of duties imposed upon it.
These powers, however, to be strictly limited to those branches in
which the commission, on the basis of experience or the constitutional
rules regarding evidence, finds them indispensable. In all other
work the commission to have no powers of compulsory examination,
and so on.
The powers of compulsory investigation and public hearings are
liable to serious abuse in order to gain some temporary publicity or
personal advantage, but in practice it is found that competent in-
vestigators and informal conferences, such as those of the proposed
advisory councils, can secure more valuable and reliable information
than when individuals are placed on the stand and required to talk
to the stenographer.
CONTINUOUS INDUSTRY, EMPLOYMENT, AND INSURANCE.
9. In all industries or occupations operating continuously day and
night and seven days a week the legislatures or Congress should
enact laws requiring three shifts of eight hours each and one day of
rest in seven, or their equivalent, administered under rules of an in-
dustrial commission laid down for each industry or establishment as
may be required.
This class of legislation has been widely adopted in European
countries, but has been found unenforceable without the aid of an
administrative body competent to take into account the many dif-
ferences of different establishments. In those countries hundreds of
different rules are issued for different industries. For example, the
rules for Pullman employees would differ materially from those for
steel mills or hotels. We consider such laws unenforceable without
this provision, and their enforcement can not be secured without a
commission under the supervision of a representative council such as
we recommend.
The Industrial Commission, with its advisory council, in its ad-
ministration of employment bureaus is evidently the body to work
out improvements not only in the bureaus themselves but in meas-
ures designed to provide for the unemployed or to regularize em-
ployment, such as workmen's hotels, or advice to Federal, State, and
municipal authorities for shifting their work to the winter months
or to periods^ of depression. These matters have been remarkably
provided for in Germany, where the employment bureaus, with their
advisory councils, have become the most effective of those in any
country.
Such measures as sickness insurance, invalidity insurance, and
unemployment insurance evidently require a large amount of investi-
gation before they can be recommended. Their principal object
should be the cooperation of employers and employees in the preven-
tion of sickness, invalidity, and unemployment. Their administra-
tion and the drafting of laws and rules will evidently have to be in-
trusted to a commission with such an advisory council as is pro-
posed.
EEPOET OF COMMISSION ON INDUSTRIAL RELATIONS. 201
POLICE AND MILITARY.
10. That such detective agencies may operate in more than one
State, or be employed by industrial corporations engaged in inter-
state commerce, or which may use the mails shall be compelled to
take out a Federal license, under the Industrial Commission, with
regulations that will insure the character of their employees and
the limitation of their activities to the bona fide business of detecting
crime. Similar license and regulation for all private employment
offices engaged in interstate business.
That all enterprises shall be forbidden the right to employ private
armed guards, except as wratchmen on the premises, or to have such
watchmen deputized as police except where such is found necessary
by the State or Federal Industrial Commission. That rules adapted
to the differences required by various industries should be made by
the Industrial Commission, in order to carry these laws into effect.
That such enterprises shall exercise their right to call upon the
constituted authorities to furnish them with the necessary protection
to their property, and to the lives of their workers, against the threat-
ened attack of rioters or strikers; and that it shall be incumbent
upon the constituted authorities to furnish such protection in the
way of police or deputy sheriffs, and that a failure on their part to
do this shall lay the political subdivision in which such damage to
life or property may take place liable to damages. That all indi-
viduals denied their constitutional rights of habeas corpus, free
access to public highways, free speech, etc., shall have similar power
of action in damages against the political division in which such
denial takes place. That all highways now claimed as private prop-
erty shall be made public.
That the militia of the several States being subject to regulation
by Congress, carefully drawn rules for their personal organization
and conduct in the field shall be drawn up by the War Department,
after conference with the Industrial Commission and advisory coun-
cil, and that all parties arrested by the militia during the time of
troubles shall be turned over for trial to the civil authorities. Simi-
lar rules should be drawn up by State authorities, with the coopera-
tion of the State industrial commission and its advisory council, for
the regulation of State constabulary. The War Department, with
the aid of the Industrial Commission and advisory council, should
investigate and recommend legislation regarding the shipment of
arms and guards in interstate commerce.
One of the principal reasons why corporations are compelled to
employ private guards is the failure of the taxpayers to provide
them. This is also one of the principal reasons why laborers and
labor organizers are denied their constitutional rights. Taxpayers
take little part in the elections or otherwise to provide officials com-
petent to and willing to protect the rights both of capital and labor,
because the invasion of these rights does not affect them. This would
be changed if the political subdivision were made liable in damages.
Yet it is not proper, as has been done in some States, to provide for
protection of property in this way without providing also for pro-
tection of labor in the same way. Laws designed to regulate deputy
sheriffs or the police force can not be made effective under our sys-
tem of local government without liability of taxpayers for violation.
202 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
The drafting of rules for the conduct of militia or State constabu-
lary should not be left entirely to military authorities but should be
drafted with the joint discussion and advice of employers and em-
ployees, who are more directly affected than other classes in the com-
munity. It is not intended that the Industrial Commission or ad-
visory council shall have a veto on any regulations issued by the
military or police authorities, but they should have opportunity for
criticism and advice. The entire subject of policing industry has not
been sufficiently investigated from all points of view, and more spe-
cific recommendations than these can not now be indorsed. It is
therefore recommended above that further investigations from all
points of view should be referred to the proper Federal and State
authorities, assisted by the representatives of all interests affected.
LEGAL AID.
11. State commissions (and perhaps the Federal Commission)
should render aid and assistance to deserving workmen in the adjust-
ment of disputes other than collective disputes, and the recovery
of claims arising out of their relations with their employers, and
generally take such action as may be necessary for the protection of
employees from fraud, extortion, exploitation, and other improper
practices. For this purpose the commission to be authorized to
assign members of its staff to appear in justice and other courts
which adjudicate such claims, and to create local advisory committees
of employers and employees to pass upon all such claims in coopera-
tion with the deputy of the commission and in advance of court
procedure.
This recommendation has been partly adopted in the New York
act. An examination of the reports of existing public agencies of
this sort and of the legal aid societies of the large cities of this coun-
try shows that by far the largest single class of cases with which they
are called upon to deal is the adjustment of small wage claims. In
some communities there already exist municipal and other so-called
" poor men's courts " and " small debtors' courts," intended especially
for the speedy settlement of small claims and disputes ; but even the
best of these courts are scarcely sufficient in themselves to meet the
situation which confronts many employees. In some of them a very
large proportion of disputes over small wage claims, in some in-
stances as high as 90 per cent, can be settled if the two parties can
only be brought together under conditions which make it certain
that if a settlement is not made there is some one standing back of
deserving claimants ready to push their cases.
Then, too, these cases frequently involve a general practice from
which many individuals suffer, and yet it is impractical for any one
of them to take the necessary action to secure redress or put an end
to the practice. Members of a given class are often made the victims
of exploitation or improper practices under conditions where it is
not practical nor worth while for any individual to fight the matter
out. and yet where the aggregate loss to the class is considerable.
The ordinary shipper is generally able to pay for necessary legal
services, and still Congress and a number of the State legislatures
have required the Interstate Commerce Commission and the State
commissions to render just such aid to shippers having claims against
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 203
railroads, because of the economic disadvantage in which an indi-
vidual shipper is placed in a contest with the railroads. That em-
ployees stand in need of such protection from the State is evidenced
by the mass of labor legislation which has been enacted and the
agencies which have been created for its administration.
Nor does such provision lack precedents other than the railroad
legislation already referred to. For some years the bureau of
industry and immigration of the New York Labor Department has,
in cooperation with the New York Legal Aid Society, extended just
such assistance to immigrants, and almost the exact provision here
recommended has been included in the industrial commission law
just enacted in New York.
Kansas City maintains its own legal aid bureau as part of the
city government, and of the five or six thousand cases a year han-
dled by it, almost half are wage claims. The largest class of cases
handled by the public defender of Los Angeles is wage claims.
The above recommendation is intended to establish in the United
States a system analogous to the industrial courts of France, Ger-
many, and other European countries. But it can not be expected
that many localities will initiate this class of courts, and it will
require a State commission to make them general. If municipalities
were given authority and then actually established such courts, the
State commission would withdraw.
LEGISLATION.
12. The Industrial Commission, upon request of the legislature or
Congress, or the committee on relations between capital and labor,
to investigate a subject and draft bills. The commission to make
recommendations regarding legislation affecting subjects under its
jurisdiction.
It is not proposed that the Industrial Commission shall initiate
legislation or make recommendations, except on laws previously
assigned to it for administration. Matters outside its jurisdiction
would bring it into the political and controversial field. Yet when
Congress or the legislature is considering new legislation, such as
sickness insurance, unemployment insurance, and so on, it might
refer the matter, in its own discretion, for further investigation and
recommendation. Advanced legislation is fought out by lobbies
and in committees, and the advantage of reference to the Industrial
Commission would be the cooperation of its advisory council in draft-
ing a workable law, eliminating " jokers," and carrying out the intent
of the legislature. At present there is no definite means provided
whereby lobbyists can be required to come together and confer
regarding measures. They appear usually as antagonists or lawyers
before legislative committees, and not as the conferees of an advisory
representative council. This proposition is by no means a novel or
untried one. After fruitless administration of the impractical coal-
mining laws, which had been placed on the statute books mainly
by the labor unions of Illinois and Colorado, the legislature turned
the matter of revising the mining code over to a joint committee
selected by the coal operators and the mine workers' union, and
then enacted into law, without amendment, the code which the two
204 REPORT OF COMMISSION OX INDUSTRIAL RELATIONS.
opposing interests, in conference with the legislative committee,
jointly recommended. The advisory committee on apprenticeship
of the Wisconsin commission has recently agreed upon an apprentice-
ship law satisfactory to employers, trade unions, and the commission,
and this was adopted by the legislature without change. This
method of legislation can be indefinitely extended to all matters, with
the result that, while both sides protect their own interests, they
: often eventually reach agreement on points where their interests and
those of the public are common.
This, of course, does not do away with the final authority of Con-
gress or the legislature, nor with the battle of opposing interests in
the legislative branch of government where they have not been able
to agree, nor where other interests are affected. Here is the proper
place for the lobbyists of both sides to endeavor to get the support
of representatives of the people, and to override the other side.
There could not be much of the advanced legislation required to meet
the problems of capital and labor without a struggle in the legis-
lature or Congress on new issues. But when the legislature is ready
to take an advanced step, it is an advantage to require the com-
batants to confer on the details and to subject their differences to
investigation by an impartial body on which they have representa-
tion. This advantage is intended in the above recommendation.
SUPREME COURTS.
13. At the request of the Supreme Court (State or Federal) the
Industrial Commission shall investigate and report upon any ques-
tions of fact referred to it by the court and bearing upon the con-
stitutionality or reasonableness of any Federal or State statute or
administrative rule on the relations of employer and employee.
Amendment of the judicature act so as to permit a State to appeal
from its own supreme court to the Federal Supreme Court on a
decision against a State based on conflict with the Federal Constitu-
tion.
While the principles of law are held to be settled and unchange-
able, their applications change when conditions change. Decisions of
the courts on the constitutionality of labor laws often turn on the
information which is placed before the court as to the necessity of
the law. The Supreme Court declared an eight-hour law for miners
constitutional and a ten-hour law for bakers unconstitutional largely
because it was furnished with conclusive information on conditions
in the mines but not in the bakeries. (Holden v. Hardy, 1898, 169
U. S. 366; Lochner v. New York, 1907, 198 U. S. 45.) the court of
New York in 1907 declared (People v. Williams, 189 N. Y. 131) a
law prohibiting night work for women unconstitutional, but held a
similar law constitutional in 1915 (People v. Schweinler Press, 214
N. Y. 395), and gave as the reason for its change of opinion the
evidence placed before it in the second case. The court said in 1915 :
1. It is urged that whatever might be our original views concerning this
statute, our decision in People v. Williams (1907) is an adjudication which
ought to hind us to the conclusion that it is unconstitutional. While it may
be th.it this argument is not without an apparent and superficial foundation
and ought to be fairly met, I think that a full consideration of the Williams
case and of the present one will show that they may be renlly and substantially
differentiated, and that we should not be and are not committed bv what was
,
saW
KEPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 205
Ui.
P'-1
and decided in the former to the view that the legislature had no power
to adopt the present statute. * * *
While theoretically we may have been able to take judicial notice of some
of the facts and some of the legislation now called to our attention as sustain-
the belief and opinion that night work in factories is widely and substan-
ally injurious to the health of women, actually very few of these facts were
lied to our attention, and the argument to uphold the law on that ground was
rief and inconsequential.
Especially and necessarily was there lacking evidence of the extent to which
during the intervening years the opinion and belief have spread and strength-
ened that such night work is injurious to women ; of the laws, as indicating
such belief, since adopted by several of our own States and by large European
countries, and the report made to the legislature by its own agency, the factory
investigating commission, based on investigation of actual conditions and study
of scientific and medical opinion that night work by women in factories is gen-
erally injurious and ought to be prohibited.
Other illustrations might be given showing' the way in which
courts respond to the needs of progressive legislation when once they
have before them ascertained facts. Investigations by attorneys or
interested parties may have a certain weight in court, but the weight
can not be as great as the investigations and findings of an impartial
commission, supervised by representatives of the interests affected
by the decision. Criticism of the courts for decisions overturning
laws designed to protect labor, and the demands for constitutional
amendments depriving the court of power to declare laws unconsti-
tutional, or providing for recall of decisions or recall of judges, often
fail to reach the real difficulty. The difficulty is that bureaus or
departments of labor and statistics have been so incompetently man-
aged or their investigations so remote from the concrete facts that
need to be established that the courts have had no reliable informa-
tion and have been compelled to fall back on their own meager
information or " common knowledge." If the court had at hand a
reliable and well-equipped referee with power to get the facts, as in
the Industrial Commission, it is probable that it would call upon
such referee instead of basing its judgment on the doubtful claims
and technical arguments of attorneys.
It will be noted, however, that this recommendation is merely sup-
plementary to those in paragraphs G and 7. In those paragraphs
the rules and regulations of the commission itself dealing with labor
conditions are tested before the court, and they are made prima f?.cie
valid and reasonable as based on adequate investigation. The present
recommendation is optional with the court and may pertain to an
act of the legislature or the rule of an administrative body upon
which the court is not reliably informed as to the facts.
A provision similar to this is included in the recent Federal Trade
Commission act (sec. 7).
The recommendation for amendment by Congress of the judicature
act is based on the fact that private individuals or corporations can
now appeal to the Federal courts if the decision of the State court is
against them, on the ground of conflict with the Federal Constitu-
tion, but the State itself can not appeal if its own State court has
decided against the State on the ground that the State law conflicts
with the Federal Constitution. It is sufficient that a State court
should decide issues under the State Constitution, but the Federal
Supreme Court alone should decide finally all issues under the Fed-
eral Constitution. With the provision % that the Supreme Court
206 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
should require the Industrial Commission to investigate and report
upon the facts which are alleged to justify the State legislation in
question, the way is prepared for the Supreme Court to have before
it the economic and social facts necessary to pass intelligently upon
these questions of constitutionality.
MEDIATION AND MINIMUM WAGE.
1-i. The Industrial Commission (State or Federal) shall appoint,
remove, and fix the compensation of a chief mediator of industrial
disputes, the chief mediator to hold his position until removed by
the Industrial Commission and to appoint such assistants as may be
needed, and to fix their compensation with the approval of the Indus-
trial Commission. He should appoint temporary mediators for spe-
cial cases, without requiring them to give up their private business
or offices.
The chief mediator and all assistant mediators to be selected from
an eligible list prepared by the Civil Service Commission on a
nonassembled examination, with the assistance of the Industrial
Commission and the advisory council.
The chief mediator and his staff to have no powers whatever of
compulsory testimony and to be prohibited from arbitrating any
dispute, from making any public recommendation, or from revealing
in any way, directly or indirectly, any information which they may
have secured from any parties relative to an industrial dispute. Any
violation to be sufficient ground for immediate removal by the Indus-
trial Commission. The powers of the mediators to«be those solely
of voluntary mediation or conciliation, but the chief mediator shall
offer his services in confidence to both sides of a dispute which, in
his judgment, is of public importance.
The chief mediator and his staff to be wholly independent of the
Industrial Commission, except as to appointment and removal, to
the extent that they be prohibited from reporting any facts or rec-
ommendations whatever to the Industrial Commission or any other
authority relative to the merits of any industrial dispute.
In case the mediator is unable to secure an agreement through con-
ciliation, he shall recommend arbitration to both parties, and if both
consent to abide by the decision of arbitrators he shall proceed to
assist them in selecting a board of arbitration in any w7ay and con-
sisting of any number of members that both sides may agree upon.
If agreement is not reached within a specified time on the third
party to the board of mediation, the chief mediator shall appoint the
same.
In case both parties do not consent to arbitration the mediator
shall recommend the appointment of a board of mediation and in-
vestigation, which shall have power to make public its findings and
recommendations, but such recommendations shall not be binding
on any person. If both parties shall consent to such a board, the
mediator shall assist them in creating the same and shall appoint the
third member, if the parties can not agree on the same within a
specified number of days.
In case both parties accept either a board of arbitration or a board
of mediation and investigation, such board, as the case may be, shall
EEPOET OF COMMISSION ON INDUSTRIAL RELATIONS. 207
ta ve power of compelling testimony. The Newlands Act and the
Department of Labor act should be so amended that all mediation
and conciliation, whether on railways or in other industries, shall
be consolidated under the mediator of the Federal Industrial Com-
mission. The Federal commission should cooperate with State
mediators.
In the case of women and children, minimum wage boards should
be created by the State industrial commissions.
The foregoing recommendation is intended to provide for strictly
" voluntary " methods of mediation and arbitration. When engaged
in this branch of its work the commission is not only prohibited from
using its compulsory powers, but its mediation work is so rigidly
separated from its other work that it can not even be suspected of
using the coercive power of Government to favor either side. The
mediator and his staff are to be strictly confidential advisors to the
opposing interests, without the power of Government, or even the
threat of using that power, to coerce either side of a collective dis-
pute. If coercion is used in the form of " compulsory testimony " it
is only with the previous voluntary consent of both sides.
The reasons for reaching this conclusion, and for recommending
that in other branches of its work the proposed commission shall
have the ordinary coercive powers of Government, are based on the
fundamental distinction between collective bargaining and the in-
dividual labor contract. The principle in general is, that Govern-
ment should not employ its coercive powers to regulate collective bar-
gaining, but should, in certain matters, employ the force of law and
administration to regulate the individual labor contract. It does the
latter through laws on child labor, hours of labor, safety and health,
workmen's compensation, sickness insurance, minimum wage, and
so on.
Collective bargaining, in its last analysis, is based upon the coer-
cive power of antagonistic classes organized for aggression and de-
fense. The bargaining power of either side is the power to use
the strike against the lockout, the boycott against the blacklist, the
picket against the strikebreaker, the closed union shop against the
closed nonunion shop, and so on. These are essential weapons, and no
plausible verbiage or double meaning of words should blind us to the
fact that these weapons are coercive, and are intended to be coercive,
and, in the last analysis, will be used, secretly or openly, as coercive,
by either side. Their object is similar to legislation regulating the
individual labor contract except that they regulate it through joint
agreement backed by their coercive weapons, instead of fines and
imprisonment.
The question then is, Shall the coercive power of Government be
used to deprive one side or the other, or both sides, of any or all of
their coercive weapons designed to control the individual labor con-
tract?
The most extreme use of this power is known as compulsory arbi-
tration. Here the Government attempts to deprive both sides of all
coercive weapons by completely prohibiting strikes, lockouts, boy-
cotts, blacklists, picketing, and strikebreaking, and by preventing
either side from using its methods of strategy designed to overcome
the other side.
208 REPORT OF COMMISSION OX INDUSTRIAL RELATIONS.
But the Government may use its coercive power to deprive either
side of only a part of its weapons or strategies. Arbitration, or a
joint agreement, consists of several steps, and at each step each side
either employs its weapons or else resorts to strategy in order to
play for position and to gain an advantage when it comes to using
the weapons.
The first step in strategy of collective bargaining is recognition of
the union ; that is, recognition by the employer of the representatives
of the union by consenting to confer with them. How important this
preliminary step is considered by both sides is shown by the mean-
ing which they give to the term " recognition." To " recognize a
union " is considered to be not to merely hold a conference with its
agents, but also to investigate grievances and demands, to negotiate
concerning the terms of a collective agreement, and even to employ
union men on terms consented to by the union. Strictly speaking,
these are not " recognition," but are steps in collective bargaining
that follow recognition. Recognition in the ordinary use of the term
(the one here usecl) would be merely a conference in which the em-
ployer meets certain individuals, not as individuals but as recognized
agents of the union authorized to speak on behalf of his employees.
But it is so well understood that recognition, even in this limited
sense, will be followed by other steps, that the decisive battle is often
fought out at this point. The employer knows that, if he meets the
leaders, the union has gained an advantage. He has acknowledged
to all nonunionists and timid unionists in his shop that the union
is something he can not ignore, and this is a flag of truce and a con-
cession for his employees to join the union or come out openly on
its side. By just so much he has weakened his bargaining power
against the union. Consequently, if he has decided not to have a
certain union in his shop he must refuse at the very beginning to
confer with its agents.
If, then, the Government steps in and compels both sides to confer,
it may take the first step in the name of " compulsory investigation "
or "compulsory testimony," without power to prevent a strike or
lockout. If the Government is given power to step in and compel
the employer and employee to testify, to produce papers and records,
it is attempting to substitute compulsion for voluntary consent at
two important steps of collective bargaining. It introduces com-
pulsory recognition and compulsory negotiation1 under the guise of
" compulsory testimony." The mere compulsion on employers,
through prosecutions, as proposed by our colleagues, to compel em-
ployers to confer with unions, can have no result, unless it be accom-
panied by compulsion to investigate, as in the Canadian and Colo-
rado acts, or to arbitrate, as in Australia. If employers are com-
pelled merely to confer they can, of course, reject all propositions,
and the nominal recognition of the union thereby secured would only
be a further opportunity for declaring their determination not to
1 Those forms may appear ridiculous, but thoy nro not more ridiculous than tho torm
"compulsory arbitration." Arbitration, strictly speaking, is the voluntary consont of
both parties to refer a dispute to a third person and to accept and carry out his decision.
It is no longer " arbitration " if the Government coerces the parties by constituting itself
the third party and compelling them to accept and carry out the decision. But if, in com-
mon xisaKo, we have ajrn'od to forgot the absurdity of compulsory arbitration, we can also
forget the same absurdity in the terms " compulsory recognition'" and " compulsory nego-
tiation."
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 209
recognize the union. If such a law is intended to accomplish any-
thing it should go further and compel the employers to submit to
compulsory investigation or compulsory arbitration, and this would
mean compulsion also on the unions to confer and testify or to arbi-
trate.
In our hearings in San Francisco we found unions that refused to
meet the employers for a joint agreement, but required them to sign
up individually the demands which the unions had already decided
upon. This can not properly be called collective bargaining or rec-
ognition of an employers' association any more than the decision of
employers not to deal collectively but to deal with their employees
individually. A law requiring employers to confer with and recog-
nize unions should also require unions to confer with and recognize
employers, and if this is made effective it would result in something
like the Canadian or Colorado acts^ described below. Employers
who are strongly fortified against unions object to compulsory testi-
mony because it weakens their bargaining power, but employers
dealing with strong unions desire it because by recognizing the union
they have already consented to investigation. Their next step is to
compel the unions to wait for the investigation before striking.
This next step in collective bargaining is usually a provision that
both sides shall continue at work or return to work while investiga-
tion and determination is in progress. This is, of course, the great
object of arbitration, and practically all voluntary methods provide
that work shall continue while arbitration is going on. This provi-
sion is recognized in the Canadian industrial disputes investigation
act, latterly adopted by New Zealand and Colorado. The Govern-
ment prohibits either side from a strike or lockout for 30 days,
pending compulsory testimony and recommendation, but the parties
are not compelled to accept the recommendation. After the 30 days
have expired they may start their strike or lockout without any
legal penalty. The Government meanwhile invites each side to
appoint its representatives on a board of investigation and media-
tion and the two to select a third member. If either side refuses to
appoint its representative the Government steps in and names the
representative. If both sides are unable to agree on the third mem-
ber the Government again steps in and names the third member. In
other words, the Government coerces each side to go through the
same forms that they would do if they agreed voluntarily to refer a
dispute to arbitration, and it prohibits them from strike or lockout
pending a finding and recommendation. This is compulsory recog-
nition, compulsory negotiation, compulsory testimony, and compul-
sory labor pending investigation, but without compulsion after inves-
tigation.
On the other hand, the weak union favors compulsory conference
and recognition because it seems to give it an advantage in bargain-
ing. Both strong and weak unions are opposed to compulsory testi-
mony because they get the equivalent by recognition, and they fear
that it will lead to the compulsory waiting of the Canadian act. For
these reasons the Canadian system should be put in the same class
as compulsory arbitration, since the Government interferes to weaken
or strengthen the collective bargaining power of either side. This
38819°— 1C 14
210 REPORT OF COMMISSION OX INDUSTRIAL RELATIONS.
is the essential point of Government intervention. The term " arbi-
tration" is misleading because it signifies the voluntary agreement
on an umpire and the voluntary acceptance of his award. But arbi-
tration can not be voluntary When the Government throws its coer-
cive power to one side or the other by appointing a representative
of either side, or an umpire, on the arbitration board without the
consent of both sides. This is coercive interference with collective
bargaining power, which is the essential element in compulsory arbi-
tration.
For this reason it can not be claimed that the Canadian system is
" voluntary arbitration." This term is also misleading. Collective
bargaining is not voluntary in the same sense that individual bar-
gaining is voluntary, since it depends on certain coercive weapons
such as strikes, boycotts, blacklists, and so on, together with strategy
in using these weapons, and these are not instruments in individual
bargaining. All that is meant by voluntary arbitration is that the
Government does not use its coercive power to weaken or strengthen
the collective coercion of either side.
The first object of the Canadian law is the commendable one of
bringing both parties together for investigation of the demands and
grievances, with the hope that, by delaying hostilities for 30 days,
time will be given for mediation, conciliation, and a voluntary agree-
ment. For this reason the boards created are properly called boards
of "mediation and investigation." It often occurs that within the
30 days both sides reorh such a voluntary agreement and, if so, the
board is dissolved after approving the agreement.
The second object is, in case a voluntary agreement is not reached
by this kind of mediation within 30 days, that the publication of a
set of recommendations by the board will bring to bear the pressure
of public opinion on both sides so that they will feel obliged to accept
the recommendations and continue at work. Compulsory recogni-
tion, negotiation, and testimony are used as the means of coercion
through the support that public opinion may give to the Government.
But mere public opinion is not enough to accomplish this object.
The next step is the compulsory arbitration of Australasia, which
brings the power of fine and imprisonment to enforce an award made
by a public official.
It is believed that any of these compulsory methods are unsuited
to American conditions, and that the foregoing recommendation for
a voluntary board of investigation, adapted from the Canadian act
but without its compulsory features, will prove a valuable addition
to the present Newlands Act, which goes only as far as voluntary
arbitration in interstate railroad disputes. If one party or the other
refuses to accept a board of arbitration with power to make a bind-
ing award, it is proposed that the mediator shall invite both to create
a board of investigation with power to take testimony and to make
recommendations which are not binding as an award. The jurisdic-
tion of the Newlaads Act is proposed to be extended tinder the
Federal Commission to all labor disputes in all industries engaged
in interstate commerce. It is believed that in many cases of serious
public concern neither side can afford to reject an offer on the part
of the Government to use its powers of compulsory testimony to
ascertain the facts and to make recommendations, provided the
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 211
parties retain their liberty to reject the recommendations. The value
of this proposal consists in the probability that a thorough investi-
gation, participated in by both sides, may lead to agreement, as it
has often under the Canadian act. But this should be brought about
by consent of both parties and not by compulsory representation of
either side, nor compulsory postponement of hostilities, as provided
in the Canadian act.
The intent of the foregoing recommendation is that the mediator
shall use all of the powers of persuasion that he can summon but is
not to use, nor to be in a position to threaten or even to suggest the
use of, any powers of coercion. Even compulsory testimony is to
be used only in case he can persuade both parties to consent to its use.
The mediator is not even permitted to make public any information
he may acquire regarding a dispute, or to give that information to
the Industrial Commission or to any other public authority that has
the power of governmental coercion. Mediation and arbitration are
to be voluntary throughout, as far as government is concerned.
The case is different with individual bargaining. Here it is recog-
nized that the individual worker is at a disadvantage with the em-
ployer. In fact, he usually makes no bargain at all. He merely
accepts or rejects the terms offered by the employer. Where this is
so, and there is a public interest to be gained, Congress or the legisla-
tures and the industrial commissions should exercise adequate com-
pulsory powers to equalize and protect the bargaining power of indi-
vidual employees.
It should be remembered that in the eyes of the law the labor con-
tract is an individual contract — a contract between an individual
workman and an individual employer. Even if the employer is a
corporation of thousands of stockholders and bondholders, they are
treated as a single individual for the purposes of a contract. But
the law does not usually recognize a collective or joint agreement
between a union and an employer or employers' association as a con-
tract. The courts will not usually enforce it as they enforce indi-
vidual contracts. Such a contract, so called, will not bind anybody
by the force of law. A contract with a trade-union is not a contract
in law; it is merely an understanding, or a usage, or a joint agree-
ment that, when the real labor contract is made between individual
employer and employee, it will be made according to the terms of
the joint agreement. If an individual employer breaks the agree-
ment by hiring a workman on different terms, the only means that
the union has of enforcing the agreement is that of a strike. It is
not a breach of contract. The union can not usually get an injunc-
tion or damages in court on account of the violation. In the same
way the employer's only practicable remedy is the lockout. He
probably can not bring a suit for damages, because the union agree-
ment was not a contract. The legislature might, of course, change
the law and provide for the legal enforcement of the collective bar-
gain. This would be compulsory arbitration. But as it now stands
a joint trade agreement is a kind of usage or understanding agreed to
by two opposing interests and generally enforced on individuals by
the coercive weapons of strike, lockout, boycott, or blacklist. It
differs from a statute in the fact that its enforcement is left to pri-
vate organizations or individuals while the enforcement of a statute
212 REPORT OF COMMISSION OX INDUSTRIAL RELATIONS.
or order of a commission is effected by the penalties of imprisonment,
fines, or damages. A minimum wage law, for example, may differ in
no respect from a joint agreement with a union, except that the one
is enforced by legal penalties or the threat of penalties, and the other
by a strike or the threat of a strike.
The practical conclusion to be drawn from this distinction is that,
since a State industrial commission may be both a mediator and a
minimum wage commission, it should act only as a voluntary medi-
ator where a union is actually in operation and securing agreements.
But where there is no effective union there the minimum wage should
apply. This is the condition of women and child workers, and for
them the State, but not the Federal commission, should create ad-
visory minimum wage boards, which, acting with the women inspec-
tors of the commission, should make investigation and recommend
the minimum wage and other conditions to the industrial commis-
sion. The last named would then hold public hearings and the rules
of law would apply as already outlined in preceding paragraphs.
The same principle applies to other labor legislation which regu-
lates the individual labor contract, such as child labor laws, work-
men's compensation, safety, health, employment offices, legal aid,
mechanics' liens, and so on. These are matters which are not usually
an issue in collective bargaining even of unions composed of men,
and do not usually lead to strikes or lockouts. Neither is the indi-
vidual workman, in making his contract of employment, able to
protect himself in these matters. When government here comes to
the aid of the weaker party to the wage bargain, it is not usually inter-
vening in the field of collective bargaining. The situation is different
in matters of wages, hours of labor, and shop rules which govern the
manner of work, dismissals, promotions, and so on. Where unions
show themselves strong enough to protect individuals in these matters
the function of government should, as far as possible, be limited to
voluntary mediation.
It doubtless has appealed to some people who consider the em-
ployer's position more powerful than that of the union, that the
employer should be compelled in some way to deal with unions, or at
least to confer with their representatives. But, if the State recog-
nizes any particular union by requiring the employer to recognize it,
the State must necessarily guarantee the union to the extent that it
must strip it of any abuses that it may practice. The State might
be compelled to regulate its initiation fees and dues, its apprentice-
ship ratio, its violation of agreements, and all of the other abuses on
account of which the employer refuses to deal with it. This is exactly
what is done through compulsory arbitration, and there is no place
where the State can stop if it brings compulsion to bear on the em-
ployers without also regulating by compulsion the unions. If so,
the whole question is transferred to politics, and the unions which
attempt to use a friendly party to regulate the employer may find a
hostile party regulating them. We believe that collective bargaining
and joint agreements are preferable to individual bargaining, and
we believe that the general public should support the unions in their
efforts to secure collective agreements. But this can only be done
through the influence of public opinion without the force of law.
It is based on the conclusion that twro opposing organizations, equally
strong, are able to drive out abuses practiced by the other. This is
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 213
very different from recommending that the Government should step
in and drive out the abuses.
This conclusion and recommendation in favor of voluntary media-
tion is based also, in part, as already stated, on the distinction
between collective bargaining and the individual labor contract.
While Government for the past 80 years has been wisely interfering
more and more with the individual labor contract, through child
labor laws, wage payment laws, mechanics' liens, workmen's compen-
sation, and so on, for the benefit of the weaker party, yet in matters
of governmental interference with collective bargaining, we have to
deal with great organized, hostile interests that are capable of using
their power in the politics of the country, in the administration of
labor laws, and even in the courts of justice. Any interference with
their collective bargaining power forces them to get control, if possi-
ble, of the political parties or the executive and administrative
officials, or the courts, that interfere. The result is more far-reaching
and destructive than the mere decision one wTay or another in a
particular dispute. It tends to corrupt or to discredit or to make
inefficient the Government itself. This country is so large, with such
extremes of sectional interests, with industrial and class interests,
with nationality and race interests, and with such extremes of wages
and costs of living, that it is an easy matter for these powerful organ-
ized interests to make alliances with others for the appointment or
control of officials. When this is done, neither side can have confi-
dence in the mediators or arbitrators who are chosen without their
consent. A system, even though compulsory only in part, is likely to
break down after a few decisions which are resented by either side.
The department or commission responsible for the decision loses
confidence and therefore usefulness. For this reason the weakest part
of our recommendation is that the mediator shall appoint the third
party to a voluntary board of arbitration or a voluntay board of
investigation in case the two parties can not agree. It seems neces-
sary that some authority be given that power. But the mediator is
likely to lose the confidence of the side that loses in an arbitration,
since he will be held responsible for the arbitrator whom he ap-
pointed. This might incapacitate him for future mediation. But we
can think of no other agency that would be acceptable to both sides.
If the ma}7or, or the governor or the President appoints the third
man, employers would object. If the courts were to appoint him the
unions would object. We are forced to recommend that this authority
be given to the mediator, but we propose that he should not be tied
down to any procedure that would prevent him from devising any
system that his ingenuity might suggest rather than fall back on his
precarious power of appointing the odd man.
After considering all forms of governmental compulsion in col-
lective disputes and even admitting their partial success in other
countries, wre conclude that, on the whole, in this country as much can
be accomplished in the long run by strictly voluntary methods as by
compulsory methods of avoiding strikes and lockouts. It can not be
expected that strikes and lockouts can be abolished altogether. Even
countries with compulsory systems have not succeeded in preventing
all of them. In our country, the voluntary method in collective bar-
gaining avoids the much more serious evil of discrediting the agencies
of Government which must be looked to for impartial enforcement of
214 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
laws affecting the individual labor contract. It is to the enactment
and enforcement of laws protecting laborers as individuals that we
must look for the removal of underlying causes of industrial unrest
and for the eventual reduction of strikes that now spring from the
cumulative abuses that individuals suffer without other effective
remedies. But the removal of these abuses can not be accomplished
without the efficient and nonpartisan administration of laws, and this
is the main purport of our recommendation for industrial commis-
sions to regulate the individual labor contract.
TRADE DISPUTES.
15. Congress and the State legislatures to enact laws similar to the
British trades disputes act of 1906, relieving employers' associations
and labor unions, as well as their members, officers, or agents, when
acting in their behalf, of criminal suits, damage suits, and injunctions
on account solely of combination or conspiracy connected with a labor
dispute, when the act would be lawful if clone by one person. Such
laws would permit the use by either side without legal penalty of
its weapons of closed union shop and closed nonunion shop, of strike
and lockout, boycott and blacklist, peaceful picketing and strike-
breaking, peaceful inducement to break a contract to work or to break
off allegiance with a union, in pursuance of an effort to win a labor
dispute. The law would not prevent prosecutions for conspiracy
where the act if done by one person would be a crime. We copy
below sections of the British trades disputes act as indicating the
kind of legislation which with modifications to suit American laws
would probably reach these objects:
Conspiracy. — An agreement or combination by two or more persons to do or
procure to be done any act in contemplation or furtherance of a trade dispute
between employers and workmen shall not be indictable as a conspiracy if such
an act committed by one person would not be punishable as a crime. * *
An act done in pursuance of an agreement or combination by two or more per-
sons shall, if done in contemplation or furtherance of a trade dispute, not be
actionable unless the act, if done without any such agreement or combination,
would be actionable.
Damages. — An action against a trade-union, whether of workmen or masters,
or against any members or officials thereof on behalf of themselves and all other
members of the trade-union, in respect of any tortious act alleged to have been
nmii'.iitUMl by or on behalf of the trade-union, shall not be entertained by any
court.
lir<nt-ii of contract and interference with business. — An act done by a person
in contemplation or furtherance of a trade dispute shall not be actionable on the
ground only that it induces some other person to break a contract of employ-
ment, or that it is an interference with the trade, business, or employment of
some other person or with the right of some other person to dispose of his
capital or his labor as he wills.
Picketing and sabotage. — It shall be lawful for one or more persons, acting
either on their own behalf or on behalf of a trade-union or of an individual
employer or firm in contemplation or furtherance of a trade dispute, to attend
at or near a house or place where a person resides or works or carries on busi-
noss or happens to be, if they so attend merely for the purpose of peacefully
obtaining or communicating information or of peacefully persuading any person
to work or nlistain from working.
Every person who, with a view to compel any other person to abstain from
doing or to do any act which such other person has a legal right to do or abstain
from doing, wrongfully and without legal authority —
1. Uses violence to or intimidates such other person or his wife or children
or injures his property ; or,
2. Persistently follows such other person about from place to place ; or,
REPORT OF COMMISSION OX INDUSTRIAL RELATIONS. 215
3. Hides any tools, clothes, or other property owned or used by the other per-
son or deprives him of or hinders him in the use thereof ; or,
4. Watches or besets the house or other place where such person resides, or
works, or carries on business, or happens to be, or the approach to such house
or place; or,
5. Follows such other person with two or more other persons in a disorderly
manner in or through any street or road,
shall, on conviction thereof by a court of summary jurisdiction, or an indict-
ment as hereinafter mentioned, be liable either to pay a penalty not exceeding
£20, or to be imprisoned for a term not exceeding three months, with or with-
out hard labor.
It is apparent from all the preceding recommendations that the
creation of industrial commissions with advisory councils, depends
for its success on the permanency of organizations of employers and
organizations of laborers. It is only as we have organizations that
we can have real representation. The preceding recommendations
are designed, through salaried positions for civil service appointees
and unsalaried positions for the representatives of organizations,
to keep the latter continuously responsible to the organizations that
elect and recall them. For this reason any policy of Government
that tends to destroy the organizations or to compel them to hide
their operations in secrecy tends to weaken the basis upon which im-
provement in the enactment and administration of labor law must
be based. Such a policy is that which permits employers to collect
damages, and in a lesser degree to secure injunctions against unions
without at the same time effectually permitting unions to bring
similar proceedings against employers' associations. The decision
in the case of the hatters' union (208 U. S., 274) awarding heavy
damages for boycotting against practically all members of the local
union, will make it possible to collect damages in all cases where an
unlawful conspiracy is shown. Since damages arise from all strikes
and boycotts, there is no conceivable limit to which suits for dam-
ages can be brought. The result must be the weakening or destruc-
tion of unions or driving them into secrecy and a more generally
avowed policy of violence.
This policy also brings the courts into the field of collective bar-
gaining, and necessarily leads, sooner or later, to the efforts of both
sides to control the judicial as well as the administrative and legis-
lative branches of Government. Just as our earlier recommenda-
tions were intended, in part, to take the administration of labor law
out of the hands of either side and to make it a joint affair, so this
recommendation is intended, in part, to relieve the courts of similar
partisanship in matters of collective bargaining. It is believed that
strong organizations of employers and employees are much more
capable than the courts of holding each other in check and prevent-
ing abuses on either side. The recommendation is intended to
recognize the collective weapons of both sides as the means of secur-
ing this result, and yet, through the Industrial Commission and its
advisory council, including mediators and the efficient enforcement
of labor laws, to minimize the necessity of resorting to these weapons.
The so-called Clayton Act of 1913 was supposed by some lawyers
to accomplish the result intended in the foregoing recommendation,
but other lawyers contend that the law of conspiracy has not been
changed by the act. At any rate, the law does not apply to the
States, only one of which, California, has adopted a similar law, and
216 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
another, Massachusetts, has withheld adoption owing to an unfavor-
able reply by the Supreme Court on the question propounded by the
legislature. It is admitted that the British act accomplishes the
intended purpose, and consequently we take it as the model in case
these other acts are found, under court decisions, not to do so.
The recommendation is, as already said, intended to prevent the
courts from interfering with the collective weapons, provided they
are peaceful, that either side uses to defeat the other side. It is rec-
ognized, of course, that these weapons are coercive and are intended
to be coercive, but they are not coercive in the sense of physical
violence. They are coercive only in the sense that numbers of people
acting together to do an act lawful for each separately have more
power over individuals than a single individual acting by himself
would ordinarily have. But even an individual acting alone may
have the same kind of coercive power, which in his case would be
lawful, as, for example, when an employer compels a union man to
give up his membership in a union by threatening to discharge him
if he does not. This kind of individual coercion is held to be entirely
lawful, and any State or Federal statute which prevents the em-
ployer from using such coercion is unconstitutional. This is so even
if the employer is a corporation with thousands of stockholders and
bondholders, for the corporation is held to be, for that purpose, not
a conspiracy, but a single person. By declaring laws unconstitu-
tional which attempt to deprive the employer or corporation of the
right to discharge a man on account of his unionism, the court steps
in to prohibit the State from depriving the employer of a coercive
weapon used to defeat the union. It prohibits a State from depriv-
ing an employer of the closed nonunion shop as a coercive weapon
against unions.
A counterweapon which the union has is the closed union shop.
If the employer discharges or threatens to discharge one of his
employees on account of his membership in a union, the only effective
weapon that the employee may have, in order to retain his member-
ship, may be a strike or the threat of a strike by his union to compel
the employer to discharge all nonunion men. In some States a strike
for such a purpose, under the decisions of the courts, is unlawful,
on the ground that it is a conspiracy to compel the employer to give
up his right to employ whom he pleases, or a conspiracy to deprive
the nonunion man of his right to work for whom he pleases. The
foregoing recommendation is intended to make it plain that no
employer or union of employers shall be prevented by law or by a
court from running a closed nonunion shop if he can, and no union
shall be prevented from compelling him to run a closed union shop
if it can, so long as the method would be lawful for a person not
backed by a union.
In a similar way it is lawful for an employer to furnish other
employers, whether members of his association or not, with informa-
tion as to whether an employee is a member of a union or a union
agitator, and to file such information in the employment bureau of
an employers' association. If the workman can not prevent his em-
ployer by law from discharging him on account of unionism, much
less can he require another employer to hire him. It is lawful also
for an employers' association to expel a member who refuses to com-
ply with a nonunion rule, and, except in case of a public utility, to
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 217
refuse to deal with him or to discriminate against him. Further-'
more, since other employers' rights of furnishing information to
fellow employers are so great, it is practically impossible to get proof
that they contain the malicious purpose which constitutes a blacklist,
and statutes preventing employers from using some of these legal
rights have been held unconstitutional. But, as a rule, the employers'
blacklist does not need to go to these extreme measures permitted by
law, because it is effective short of these measures.
The case is different with the union's weapon, the boycott. To
carry out a boycott the union must circulate " unfair lists " and must
induce as many persons as possible to withdraw their patronage.
The courts distinguish between the primary boycott and the sec-
ondary boycott. The former is perhaps legal in some cases, just as
a strike is legal, for it is merely the refusal to patronize an em-
ployer on the part of the same persons, or their fellow unionists,
who have struck against the employer, or who are locked out or
blacklisted by him or his association. It is doubtful, though,
whether this primary boycott is legal if it extends to members of
unions other than the one directly injured. The American Federa-
tion of Labor, for example, can not carry out a primary boycott on
goods which the hatters' union has boycotted, since it is prohibited
from publishing the information. And even the strike and the
primary boycott are sometimes unlawful if the court holds that the
purpose or the means are unlawful. The courts will not directly
enjoin either a strike or a primary boycott. They can not compel a
man to work or to purchase. But they can make the unlawful strike
or primary boycott ineffective by enjoining even peaceful picketing
or persuasion, or the circulation of " unfair lists " designed to notify
others that the boycott is on.
But the secondary boycott is generally held illegal because it is
an additional boycott placed upon a third party, usually a merchant,
who continues to sell the goods of the boycotted employer. As to
this third party the boycott is primary, and he can secure an injunc-
tion or damages on the ground of conspiracy to injure him without
just cause, or to compel him to break a contract, if he considers the
damage to himself worth while. But boycott suits are not often
brought by third parties, either because the damage to them is
usually slight, since they only need to patronize other manufac-
turers whose goods the boycotters are willing to buy, or because the
courts protect them through suits brought by the party originally
boycotted. The employer originally boycotted would not secure
protection if he depended on a hundred or a thousand boycotted
merchants not seriously concerned to bring separate suits. Con-
sequently the vast majority of boycott cases are brought by the per-
son primarily boycotted, in order to prevent the spread of boycotts to
other persons who deal with him; in other words, to prevent a sec-
ondary boycott against himself. The boycotted employer hides be-
hind the alleged injury done to third parties in order to get damages,
not for them, but for himself, as in the case of the Loewe Co. against
the hatters' union. The ground of action is not injury to third par-
ties, but interference with the employers' right to have free and
uninterrupted business dealings with all who wish to deal with him.
This does not seem to be equal treatment of the employers' blacklist
which interferes with the unionists' right to have uninterrupted
218 REPORT OF COMMISSION 0!ST INDUSTRIAL RELATIONS.
access to all employers, and the employees' boycott which interferes
with the employers' right of access to the commodity market.
The arguments now used to declare the secondary boycott illegal
are those formerly used to declare the strike and the primary boycott
illegal. Our recommendation simply carries forward another step
the effort to secure equality between organized capital and organized
labor.
Of the other weapons, the strike and lockout, the employers' asso-
ciation does not usually employ its weapon, because it can force the
union to strike or yield, but the strike is illegal if the purpose is
illegal, such as the purpose in some States of securing a closed union
shop. The recommendation is intended to remove all illegality from
the strike.
This recommendation is intended to do away with the doctrine of
conspiracy for both employers' associations and labor unions, except
in so far as the conspiracy is one to commit what would be a crime
for one person, and to do away with all suits for damages, including
injunctions to prevent damage, against a union or against its mem-
bers when acting for the union, except suits for damages against
conspirators to commit a crime.
The doctrine of conspiracy is based on the undoubted fact that,
while a lawful act done by only one person may be coercive and cause
damage, or be intended to cause damage, yet the coercion and damage
are ordinarily so small, compared with the social advantage of liberty
to do as one pleases, that, except in breach of contract, the court does
not entertain a suit at law for damages or for prevention of the coer-
cion that causes damages. Yet the same lawful act, if done by agree-
ment between two or more persons, may reach a point of coercion
where the damage, compared with the social advantage of liberty to
combine with others, is so serious that the agreement becomes un-
lawful. Therefore, those who enter into an agreement to do an act
which would be lawful without the agreement, or their agents, may
be prosecuted for damages or may be prevented by injunction from
using the coercive power of numbers to cause the damage. It is this
doctrine of conspiracy, or coercion through mere numbers, that is
sought to be removed by the recommendation. Individuals and the
individual members of unions who conspire with them would con-
tinue to be arrested, prosecuted, and punished as individuals or con-
spirators for all acts which are criminal for them as individuals, but
no suit for damages could be brought against the union for acts
committed by or on behalf of the union.
In other words, the recommendation removes completely the doc-
trine of civil conspiracy according to which damages may be col-
lected or injunctions issued. It, however, retains the doctrine that
all conspirators who join in procuring an act that is criminal for
one person to do are likewise guilty with the person who does it.
This might include all the members of a union if all were proven
actuary to have joined in such a conspiracy. Those who conspired
could still be prosecuted and sent to prison, as was done in the case
of the officers and members of the structural iron workers for trans-
porting dynamite. The recommendation is not intended to change
the law in this respect. It would change the law in the hatters' case.
Employers are already learning the ineffectiveness of the injunc-
tion and the danger to themselves of throwing on the courts the
burden
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 219
burden of protection which they can as readily secure through their
own organizations. With their advantages of position, both as
owners of the means of livelihood and the possessors of the power of
discharge and of blacklist of union members which goes with the
ownership of property, they have a superior power over unions.
Our recommendations do not grant employers' associations rights
additional to those which they now enjoy in fact; they merely grant
the unions corresponding rights.
The British act also defines the kind of picketing that is criminal
in that it is not peaceful, and thereby defines what is peaceful picket-
ing. In these cases of illegal or criminal picketing and in the de-
struction or damage to physical property those who have done the
criminal acts and those who have conspired to have them done may
be fined and imprisoned, but the union funds or the property of its
members not proven to have joined in the criminal conspiracy could
not be taken for damages.
Without entering into further details, the object of the recom-
mendation is to place unions and employers' associations upon an
equal basis in the use of their competitive weapons.
Regarding the constitutionality of this recommendation it should
be noted that it takes both employers' associations and unions from
under the operation of the antitrust laws. This differs from the
Clayton and other acts which take only unions from under the anti-
trust laws or common law and might be good ground for declaring
these laws unconstitutional. The British act does this by distinguish-
ing between employers as merchants or associations of manufac-
turers, who sell commodities to the public, and whose bargain may j
be called the " price bargain," and the same employers in the differ-
ent function of dealing with labor, and whose bargain is the "wage
bargain." The employers, in their function of merchants and manu-
facturers, or sellers of products or commodities to consumers or the
Sublic, continue to come under the antitrust laws, and the Interstate
ommerce Commission, the Federal Trade Commission, and the State
public utility commissions have been created for the purpose of pro-
tecting the public against them as such. These commissions regulate
price bargains for commodities or products, between corporations
and consumers.
But it does not follow that even the same employers when organ-
ized to regulate the wage bargain with employees should be treated
as a conspiracy or trust. They perform a very different function
and public policy is very different. In the case of the price bargain
the public is interested in securing low prices, but in the case of
wage bargain it is interested in permitting high wages. Yet the
public needs protection against abuses of labor unions as it does
against the abuses of trusts. The employers' association stands be-
tween organized labor and the public just as the railroad and public
utility commissions and the trade commission stand between mer-
chants' or manufacturers' associations and the unorganized public.
But the employers' associations are a better protection to the public
against the abuses of unions than are the courts. Labor leaders who
wish to keep discipline in tTieir unions and the observance of joint
agreements realize that they can not do so unless confronted by a
strong employers' association. They realize that continued abuses
lead eventually to the destruction of their unions. An employer who
220 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
stays out of his organization is as culpable as a laborer who stays out
of "his union. Employers should organize 100 per cent just as the
unions endeavor to reach that mark.
It would, therefore, seem to be proper and constitutional classifi-
cation in the interest of public policy to treat manufacturers under
a law prohibiting or regulating trusts and public utilities and to
treat the same persons as employers under different laws, like those
of mediation and trade disputes, where both employers' associations
and trade-unions are given immunities for the use of peaceful coercive
weapons which they do not possess under the antitrust laws.
FOUNDATIONS.
16. Considerable attention has been given by this commission to
the largest foundations or endowments now in the hands of private
trustees. Any proposed legislation on this subject should be pre-
ceded by a complete investigation of all foundations and endow-
ments, else the law would have effects not contemplated by the legis-
lature or Congress. Such an investigation would include all en-
dowed charities, endowments of religious organizations and uni-
versities and colleges. We are informed that such investigations have
been made in England and France, resulting in legislation. The in-
vestigation should be complete, covering all aspects of the question
and bringing out both the advantages and the disadvantages of such
foundations and endowments. The legislature could then act intelli-
gently on the subject.
We are convinced that many of these endowments in private hands
have a beneficial effect on the work of State and governmental insti-
tutions. Large private universities have set the example and stimu-
lated the States to support and enlarge their State universities.
Some of the investigations and reforms started by recent large foun-
dations have already induced Congress and administrative depart-
ments to enter the same field and to extend it. In fact, almost every-
thing that Government now does was done at first through private
initiative, and it would be a misfortune if private endowments, unless
plainly shown to have committed abuses, should be prohibited. Even
their abuses can be rectified by the legislature through its control
over charters, if reasonable ground can be shown. But it is better,
for the most part, that they should go on at their own initiative in
order that the people through their Government may see the value
of their work and then take it up and extend it more widely than
the private foundations are able to do. It is largely for this reason
that we recommend a "Federal fund for social welfare" (par. 18),
in order that the Nation may compete with or displace private
foundations in this vital matter.
However, experience has abundantly shown that there should be
no alliance between these private foundations or endowments and
the Government. The State or Government should neither subsidize
them nor be subsidized by them, nor cooperate with them. Such co-
operation has often led to public scandal. Instead of subsidizing
private charity the State should use its money to displace it by better
and more universal charity. Instead of calling upon private founda-
tions for help, the Government should treat them as competitors.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 221
No effort on the part of Government officials to secure financial as-
sistance from them should be allowed.
SUBSIDIES.
17. The Federal commission to have charge of all subsidies
granted to the States for the promotion of industrial education,
safety, employment offices, and other matters, as Congress may de-
termine. The commission to meet the expenses of State officials when
called together for conferences on standards and uniformity. Sub-
sidies to be granted on condition that the standards are maintained.
The Public Health Service now has authority to call conferences
of State health officials and to meet their expenses. The same power
should be given to the proposed industrial commission. A large part
of the work of the commission will be the field work of advising
State officials as to the best methods of administration. This kind of
work is now done by the Department of Agriculture and the Public
Health Service.
Subsidies are recommended in certain cases because the State
governments are not in position to secure adequate funds and as an
inducement to bring their standards up to the standards formulated
by the Federal commission.
(Funds for this purpose are recommended in paragraph 18.)
FEDERAL FUND FOR SOCIAL WELFARE.
18. A Federal inheritance tax on all estates above $25,000, begin-
ning at 1 per cent on the excess above $25,000 and rising to 15 per
cent on the excess above $1,000,000 for the class of direct heirs, such
as wife, children, and parents. Higher rates for more remote rela-
tives and strangers. The Federal inheritance tax to be a supertax,
added upon the existing rates assessed by the States. Provision,
however, to be made that any State which repeals all inheritance tax
laws, or refrains from enacting them, shall receive from the Federal
Government, say, 50 cents per capita of its population per year. The
administration "and collection of this tax to be placed in charge of
present assessors and collectors of income taxes, who already collect
income taxes on estates in the hands of executors. Kevenues derived
from inheritance taxes to be placed in trust with the Federal Reserve
Board for investment in securities approved by Congress. The fund
to be known as " Federal fund for social welfare." Expenditures of
income derived from such securities to be made under the direction
of the Federal industrial commission for such purposes of industrial
and social welfare as Congress may authorize. Should the income
from investments not be adequate to meet the authorized expendi-
tures, further investments to be withheld and the principal to be
expended. Revenues derived from activities of the commission, such
as head tax on immigrants, etc., to belong to the fund. Also unex-
pended balance to be held in the fund for disposition by Congress.
A similar fund collected from immigrants in excess of the ex-
penses of the service is held with accruals for disposition by Con-
gress.
222 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
We have previously shown the need of improved administration
in providing for any future program of social legislation. We have
held that it is useless to undertake any additional labor legislation
if effective, nonpartisan machinery of administration is not pro-
vided, but even with such machinery it can not be expected that the
•expense of government will be reduced. In fact, the expenses will
be increased, and no legislation should be attempted unless the possi-
bilit}^ of getting these revenues is fully considered.
Moreover, these revenues must be continuous, else the whole pro-
gram will be liable to sudden breakdown through failure of funds.
Hostility to labor laws is just as effective when it succeeds in killing
appropriations, on the ground of economy, as when it defeats the
law itself.
Already the increased expense of administration of labor laws is
bringing active and effective protest. The greatest leap in this ex-
pense has come with workmen's compensation. So far as this increase
is due to inefficiency of the existing political and partisan methods
of administration the protest is valid. The remedy consists in im-
proving the efficiency and eliminating the partisanship, and this is
the purport of what we have previously said. So far, also, as the
increase places excessive burdens of taxation on the already burden-
some taxes of the people, the protest also is valid. But here the
remedy consists in discovering new sources of revenue that will not
be burdensome.
A Federal inheritance tax, partly distributed to the States, seems
to be the most appropriate method of securing these new sources
of revenue. The principal underlying cause of social unrest is the
uncertainty of income of wage earners and small producers. A
steady, continuous income, even though it be small in amount, is of
more importance than high wages or earnings at certain times and
no earnings at other times. This uncertainty of income is the main
cause of the dependence, inequality, and oppression which produce
conflicts between capital and labor.
The great majority of wage earners can not provide in advance
for future contingencies when they will get no income. These con-
tingencies come from accidents, sickness, invalidity, old age, death,
unemployment, and the lack of industrial education.
There are two main reasons for this inability to provide for con-
tingencies: (1) Inability in bargaining for wages to take into account
future contingencies and future cost of living. The w^age earner may
be able when bargaining to get enough wages for current cost of liv-
ing, but he does not include insurance premiums in his notion of
current cost, except so-called " industrial insurance " to provide for
funeral expense. (2) Lack of thrift and habits of saving, owing in
part to their own fault and in part to the contingencies which eat
up their savings and bring discouragement. In either case, under
competitive industry, the condition may be accepted as permanent.
On the other hand, employers and investors are much more able to
provide in advance for a future continuous income against contin-
gencies. All investments are made with reference to equalizing the
flow of income over a future period of time in the form of interest or
dividends.
Inheritances are the principal means by which owners, without
effort or thrift on their part, secure titles to wealth and its future con-
tinu
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 223
tinuous income. Consequently, for the Government to take a part of
large inheritances which provide continuous incomes and to devote
the proceeds to the purpose of making incomes more nearly continu-
ous for those who are not able, under existing conditions, to do it for
themselves appeals to the sense of justice. It may be accepted in
advance that men of wealth will approve of an inheritance tax on two
conditions, namely, that the tax will be devoted to a great public
purpose, and that the funds will be administered economically and
efficiently without partisanship or practical politics. These two con-
ditions are essential and are contemplated in our recommendations
for a Federal industrial commission and a Federal fund for social
welfare.
Some of the purposes for which this fund might be used, in order
to meet the object of social welfare, are, in addition to the overhead
expenses of the commission, the safety and health agencies of the
Federal Government and, perhaps, subsidies to States conforming to
standards ; industrial education and subsidies to States ; Federal em-
plo3rment offices and subsidies to States which adopt an approved
plan coordinating with the Federal plan; Federal supervision of
private employment offices doing interstate business; investigation
and statistics of labor conditions; mediation; administration of im-
migration laws ; workmen's compensation and subsidies to systems of
sickness, unemployment, and other forms of social insurance as may
be approved by Congress. Opportunities for investment should be
considered, such as workmen's houses, workmen's hotels, hospitals,
rural-credit associations, and similar investments made by Germany
in respect of its various insurance funds.
It is impossible to estimate at this time the revenue that would be
derived from such a tax. We have estimated the amounts now col-
lected by the States from inheritance taxes at $25,000,000, as against
the $50,000,000 that they would receive at 50 cents per capita, The
present systems in vogue in 32 States yield revenues from $1,096 in
.Wyoming to $11,162,478 in New York. The amount per capita of
population ranges from 1 cent per capita in Texas and Wyoming to
59 cents in Connecticut, 66 cents in Illinois, 68 cents in Massachu-
setts, and $1.28 in New York. The latter four States wrould lose if
they abolished their inheritance tax and accepted the Federal dis-
tribution of 50 cents per capita. Other States would gain. Yet this
can not be considered a just criticism of the proposal, for the States
which lose are those in which wealthy people choose to reside and
yet their fortunes arise from ownership of property scattered
throughout the country. The present system of State inheritance
taxes practically permits a few States to collect taxes on property
whose value is created by many of the States. A Federal inheritance
tax is the only method by which the entire Nation, which contributes
to the value of estates, can secure revenues from the values which it
creates.
The recommendation of returning 50 cents per capita to the States
is designed to induce them to turn over to the Federal Government
the sole right of imposing inheritance taxes and yet to preserve to
the States at least a part of such preempted claims as they may have
acquired by getting into the field first.
The Federal machinery is already in existence for collecting in-
come taxes, and the same officials, without any appreciable increase
224 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
in the number, can assess and collect inheritance taxes. Executors
of estates whose annual incomes amount to $2,500 or more per year
are now required to make returns to collectors of internal revenue,
and the only addition required for an inheritance tax is that executors
of estates of $25,000 should make returns of the total value of the
estates. This can, of course, be done at the same time when they fill
cut the blanks which show net incomes. Internal-revenue officials
also investigate all cases where it is suspected that full returns of
income are not made. No additional officials are therefore required
for these purposes. The only addition would be such number of
officials as are required for general supervision. The machinery is
already in existence, and no tax can be so cheaply administered as a
Federal inheritance tax.
The significant feature of the proposed inheritance tax is the
high rates on direct heirs, as compared with the very low rates im-
posed in the States. The estates going to wife and lineal heirs in-
clude probably 80 per cent to 90 per cent of all estates, and it is
therefore from such estates that the largest revenues are expected.
Such estates are scarcely touched by American inheritance tax laws.
The sensationally high rates imposed in some States on estates going
to strangers and remote heirs are something of a delusion, for
scarcely 5 per cent of the estates go to such beneficiaries. The rates
on estates going to strangers reach their highest figure at 35 per
cent in California on the excess over $1,000,000 and fall as low as 5
per cent in Pennsylvania and other States. But the rates on the ex-
cess over $1,000,000 going to direct heirs is only 10 per cent in Cali-
fornia and falls to 1, 2, or 3 per cent in most of the States. Our
recommendation affects mainly these estates going to direct heirs,
which are 80 to 90 per cent of all estates, and the highest rate on
such estates is 15 per cent on the excess over $1,000,000. This con-
forms more nearly to the inheritance taxes of leading European
countries which would yield according to various estimates over
$200,000,000 if adopted by the Federal Government of this country.
The following administrative reasons for making the inheritance
tax a Federal tax are submitted by Prof. T. S. Adams, of the Wis-
consin tax commission, who also suggests the repayment to States
as a method of inducing them to yield to the Federal tax. He says :
1. The present system gives rise to a large amount of double or multiple
taxation and if the existing laws were enforced, the situation would be un-
bearable. Most State laws tax the transfer of all securities owned by resident
decedents and yet attempt to tax the transfer of some securities owned by non-
resident decedents when they represent property in the State passing the
law. I have known one block of railroad stock to be assessed in Wiscon-
sin (residence of decedent), in Illinois (where the stock was deposited in a
trust company), and in Utah, where the railroad was incorporated, and it is
not unlikely that other States through which the railroad passed imposed a
tax before the estate was finally settled. Four different and conflicting taxes
are thus in use at the present time.
2. At present administration of such laws is costly, ineffective, unjust, and
capricious. Wisconsin attempts to tax the transfer of all securities represent-
ing, however indirectly, property in Wisconsin. It is impossible where
holding companies hold the stock in the companies immediately owning the
AVisconsin property. To enforce it, particularly where bonds are concerned,
agents must be employed outside the State. We keep two — in New York and
Chicago. We should have an agent in every place in the country where estates
are probated. To enforce the Wisconsin interpretation would cost an enormous
sum.
REPORT OF COMMISSION ON INDUSTKIAL RELATIONS. 225
3. Yet the Western States are insisting on the Wisconsin idea in inheritance
taxation. As they do so, double taxation and cost of administration must in-
crease greatly. Cost of administration has not been excessive in the past,
merely because the laws have not been enforced.
4. Except in a few States the yield of the inheritance tax is very irregular.
The proposed commutation payment by the Federal Government would sub-
stitute a regular for an irregular State revenue, besides greatly decreasing cost
of collection — or prospective cost of collection.
5. Rich men change their rendezvous very easily. Rhode Island and a few
other States do not tax inheritances at present. They do and can prevent the
proper development of inheritance taxes in other States. It is the compulsion
of the " twentieth man."
6. A number of States can not employ progressive rating in inheritance tax-
ation— an essential attribute of sound inheritance taxation.
IMMIGRATION.
19. Underlying the entire problem of self-government in this
country, and placing a limit on the ability to remedy abuses either
through politics or labor unions, is the great variety of races, nation-
alities, and languages. We know how the Southern States have dealt
with the problem and how constitutional amendments forced upon
them by the Northern States have been treated. Considering this
outcome, it is doubtful whether the additional proposed amendments
designed to protect rights of individuals in those or other States
would accomplish the ends intended.
A similar problem is forced upon us by the large immigration of
backward races or of classes from other countries with no experience
in self-government. One of these races, the Chinese, has been actu-
ally excluded from immigration. Others less competent are admit-
ted. The doctrine of a haven for the oppressed has been rejected
in the case of the Chinese and can not consistently be raised against
restriction on immigration designed to accomplish a similar purpose
of protection to Americans. Especially is the problem of the Ameri-
canized element in the labor unions in maintaining discipline almost
insoluble when it comes to dealing with 10, 20, or 30 races or lan-
guages. The right of employers to bring aliens into their establish-
ments is the same as their right to bring in naturalized or native
Americans. The resulting situation is the great strikes recently en-
tered upon without previous organizations or discipline by nation-
alities that have suddenly come together, notwithstanding their
racial antipathies and language impediments, on account of a united
antagonism against their employers. Such strikes receive but little
consideration from American police, sheriffs, and militia and are
usually defeated. On account of their incapacity for self-govern-
ment, it might perhaps be shown that in isolated communities the
paternal despotism of a corporation is preferable to unionism or
political control by these backward nationalities. The violation of
contracts and inability of their leaders to maintain discipline and
observe contracts, which make some American employers so deter-
mined against recognizing unions, may often be traced back to the
unruly mixture of races and nationalities whom they have employed.
Other problems, such as those of the political franchise, must be
taken into account in any measure designed to further restrict immi-
gration, but we are convinced that very substantial restrictions on
immigration, in addition to the present restrictions, should be
38819°— 16 15
226 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
adopted, and that comprehensive measures should be taken to teach
the English language and otherwise "Americanize " the immigrants.
One of the principal services of American trade-unions is their work
in teaching immigrants the practice of democratic government. They
might almost be named as the principal Americanizing agency. An-
other promising measure is the so-called social center, designed to use
the schoolhouses and public buildings for instruction and discussion
outside school hours. Such a measure, if adopted by all States, as
has been done by some, wrould be of advantage also to native Ameri-
cans in the free discussion of public questions.
Since immigration is one of the principal issues between capital
and labor, its administration should be turned over to the proposed
Federal industrial commission, where capital and labor will have an
equal voice. This would place all administrative positions in the
service, up to and including the Commissioner General, under the
civil-service rules proposed in paragraph 3. In 1905, when a trade-
union man was Commissioner General, he was required by the ad-
ministration to give written or oral instructions to inspectors not
to make any arrests of Chinese for deportation as required by law.
(Washington file, 15427 1C.) Instead of resigning and making
public protest he yielded and gave the required instructions, which
practically nullified the law by preventing the deportation of smug-
gled Chinese. Had such orders been required to be submitted to the
advisory council, as proposed in these recommendations, a public
protest would have been made by the labor members of the council,
since they would be responsible to their unions and not to the Gov-
ernment for their salaries. Even now, with the many charges of
Chinese smuggling, the presence of unsalaried labor representatives
on an advisory council, with the right to have access to all the records
and to have all orders submitted to them before issuing, would place
them in a position to prevent such secret violations of the law. In
addition they would receive through their fellow-unionists through-
out the country complaints or evidence against inspectors supposed
to be in conspiracy with Chinese smugglers and would be in position
to present their charges and to require investigation and removal
if necessary. Various outside commissions, including this commis-
sion, have been required to investigate the matter of Chinese smug-
gling, but they are baffled. The advisory council proposed would be
a continuous commission not terrified by any political administration
and having a voice in the appointment and removal of inspectors
under civil-service rules. (See par. 3.) Doubtless appeals from the
commission to the Department of State and the President should be
allowed in cases involving political refugees and the interpretation
of treaties with foreign countries. These are substantially pur con-
clusions derived from the attempted investigation of Asiatic smug-
gling.
FARMERS AND FARM LABORERS.
^ 20. One of the growing evils to be feared is the increasing conges-
tion of populated centers at the expense of the rural districts. This
is true not only of America but also of Europe. The allurements of
the city tend to draw annually thousands from the country to the
city. Congested cities, especially in hard times, mean enlarged ranks
of the unemployed.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 227
This tendency is strengthened where the struggle of the small
farmer not only to hold on to his land but to make a living becomes
hopeless and where the conditions are such that the farm laborer or
the farm tenant sees little or no possibility of becoming a future
landowner.
Not least among the causes of higher cost of living has been the
tendency to increase city populations at the expense of agricultural
populations, thus decreasing relatively the supply and increasing the
demand and thereby inevitably raising the cost of food.
The last census shows that we are becoming the victims of increas-
ing absentee landlordism and farm tenancy. It points out that
while the number of farm owners during the preceding decade in-
creased 8 per cent, the number of farm tenants increased 16 per cent.
If this ratio should continue for a few more decades, many parts of
our Republic will find themselves in the condition from which Ire-
land has so recently emerged.
> For many generations Ireland was one of the most distressed
countries in the world. All of its evils wTere due primarily to
absentee landlords and farm tenants. But within the last decade a
wonderful change has taken place in the social and economic condi-
tion of the Irish peasant, brought about by the enactment by Parlia-
ment of what has since become known as the Irish land bill. This
act created a royal commission, with power to appraise the large
Irish land estates owned by absentee landlords, at their real and not
at their speculative value, to buy them in the name of the Govern-
ment at the appraised value, plus 12 per cent bonus, to cut them up
into small parcels, to sell them to worthy farm tenants, giving some
TO years' time in which to make small annual payments on the amor-
tization plan, the deferred payments bearing but 3 per cent interest.
In addition to this, the Government made personal loans to peasants
sufficient to cover the cost of stock and farm implements, also pay-
able in small annual installments bearing a minimum rate of interest.
The Government further furnished the various farm districts with
farm advisors, trained graduates from agricultural colleges, who act
as friend, adviser, and scientific farm instructor to the peasants.
Within a decade the wretched and more or less law-breaking farm
tenant has been converted into an industrious, progressive, and law-
abiding landed proprietor; in fact, he has become so law-abiding
that many jails in the farming districts, formerly filled with agra-
rian criminals, have been converted into public schools.
In Texas this commission found a condition of farm tenancy like
that of Ireland and seemingly typical of growing conditions in
various parts of the country. We therefore recommend to Congress
and to the various States that steps shall be taken to lighten the bur-
dens of the small farmer, and make it more possible to encourage
the tenant, farm laborer, and city dweller to become land proprietors.
Not least among the burdens of the small farmer is the great diffi-
culty, as a rule, on his part in obtaining the necessary credit with
which to better and to improve his land, at a low rate of interest
and under terms that will permit him to make payments spread over
a long term of years.
Under the rural credits system of Germany a small farmer can
borrow his money as cheaply as can a great banker. Not only can
he do this, but he can spread the payments over a period of 30 or
228 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
more years. It is this system of rural credits, among other things,
that has made it possible for the German farmer, despite the high
price of his land, his heavy taxes, and his small acreage, ^not only
to successfully compete with the American farmer, but to enjoy a fair
degree of prosperity; so much so that in more recent times there
have been comparatively few German agriculturists who have emi-
grated to this country.
We therefore recommend that Congress and the various States pass
rural credit acts that will give to the small American farmer the same
privileges and benefits that for so long a time have been enjoyed by
the small farmers in Germany and other European countries, which,
following Germany, have adopted rural credit systems. We recom-
mend serious consideration to adapting the Irish land bill and the
Australian system of State colonization to our American conditions.
It is not our intention in this report to enter into minute details as
to how this should be carried out In a general way, however, we
believe it not only desirable but practicable for the Federal Govern-
ment, through its Department of Agriculture, and the various States,
through their departments of agriculture, to secure large bodies of
land at appraised actual values, that have been thoroughly tested by
experts for their quality, issuing bonds for the payment for same, if
need be, and to cut them up into small parcels, making the necessary
improvements and selling them to qualified colonists with small first
payments, making the balance payable in, say, 30 years on the
amortization plan, the deferred payments bearing only the same rate
of interest that the Government itself is called upon to pay, plus a
small addition to cover the cost of Government administration. We
believe in this way the most effective check can be created, on the one
hand, to minimize farm tenancy and, on the other hand, to make it
possible for the farm laborer and the farm tenant to become land
proprietors. We believe that this, if carried out wisely and intelli-
gently, will have a large share in minimizing industrial unrest and
in adding to the wealth of the Nation, both materially and in the
quality of its citizenship.
CORPORATION CONTROL.
21. Corporation control over politics and labor has for a long time
been a well-known matter of serious concern in all American States.
This commission has held hearings on the subject of such control in
isolated communities at Lead, S. Dak., Butte, Mont., and in Colorado,
and other communities were partly investigated by a member of
the staff.
In Lead we found a strong union had recently been driven out
on account of its sudden demand for the closed shop, and this was
followed by a paternal absolutism that controlled labor, business,
and politics. In Butte we found a strong union split into factions
and destroying its own property, followed by refusal of the corpora-
tion to deal with either faction. In Colorado we found a long his-
tory of refusals to deal with unions, accompanied by strikes at inter-
vals of 9 or 10 years. In each of these cases the ownership and con-
trol of the property was in the hands of absentees, who left the oper-
ating management to executives on the ground.
We condemn the conditions found in Colorado which show the
control of corporations over labor and politics, and we find there a
EEPOET OF COMMISSION ON INDUSTRIAL RELATIONS. 229
system that has taken hold throughout the country. Here the serious
problem is not the personality of any individual who may or may not
be responsible, but the correction of a system which has grown up
mainly under absentee ownership and which determines the acts of
individuals according to their self-interest within the terms pre-
scribed by the system. Immediate and public action is necessary to
see that courts of justice are not prostituted to the service of one
class against another, but the huge system of corporate control re-
quires more far-reaching remedies before attainment. Absentee own-
ership can not be brought to the sense of its responsibility without
the enactment and adequate enforcement of workmen's compensa-
tion for accidents and occupational diseases, sickness, invalidity, and
old-age insurance. Meanwhile a partial method of meeting its re-
sponsibility is a staff of safety, health, and labor commissioners,
independent of the local executive staff, to report directly to the
board of directors. The work of such a staff is directly in conflict
with that of the executive staff, for the latter must get out "pro-
duction '5 while the other must acquaint the directors and company
with the oppression of labor which increased production and lowei
costs often bring. The labor department can not be made subordi-
nate to the executive department if the corporation really intends to
safeguard its employees.
We are not in favor of public ownership as solely a matter of
improving labor conditions, and before such can be recommended
there should be a more complete investigation and regulation and a
clearing up of the values that will be paid and the administrative
control that will follow. More immediate and necessary is a series
of laws that will take the control of politics out of the hands of
corporations and place it in the hands of the people. Several of
our previous recommendations are intended to accomplish this pur-
pose in so far as labor and capital are concerned, but we should add
effective corrupt practices acts, designed to protect the secret ballot,
to limit the amount of money and number of paid electioneered in
elections, to prevent intimidation, and so on, as far as elections are
menaced by political machines and wealth. Direct primaries for
the nomination of candidates, protected by corrupt practices acts.
Constitutional and legislative initiative for State and Federal Gov-
ernments. The initiative would permit the people to change the
Constitution at any point where the courts had depended upon it for
a decision, and would make unnecessary any provision for recall of
Supreme Court judges or of their decisions, or of taking from higher
courts their power to declare laws unconstitutional. The recall of
elected officials, including executives and judges of the lower courts,
but not judges of the supreme courts or members of the legislature.
Proportional representation, as adopted in Belgium, South Africa,
Australia, and the Irish parliament, by which all parties or factions
would be able to elect their own representatives in the legislatures
or Congress in proportion to their numbers and without making
deals with other parties. This would permit a labor party to have
its representatives, as well as other minor parties, and would permit
women, who we consider should have the suffrage, and other minor
parties to elect their own representatives without making com-
promises in order to get the votes of the major parties. These minor
230 REPORT OF COMMISSION" ON INDUSTRIAL RELATIONS.
parties, containing as they do the advanced views on labor and social
problems, are entitled to their proportionate share of influence in the
legislatures or Congress. It can be seen that such a measure would
take away from corporations much of their present inducement to
control the great parties. It would furnish a legislature which
would be a true reflection of the wishes of all the people. This
recommendation applies to the legislature the principle of repre-
sentation of interests, which we advance in the case of the advisory
council to the Industrial Commission.
JOHN R. COMMONS.
FLORENCE J. HARRIMAN.
HARRIS WEINSTOCK.1
S. THRUSTON BALLARD.1
RICHARD H. AisHTON.2
. — Commissioner Weinstock also presented the following dis-
senting opinion :
I dissent from the report prepared by Commissioner Commons on
the question of immigration. That report says :
We are convinced that very substantial restrictions on immigration, in addi-
tion to the present restrictions, should be adopted.
I am of the opinion that we have abundant immigration laws
already on our statute books which, if enforced, will keep out of the
country unfit immigrants. In normal times this country can profit-
ably employ all the desirable and fit occidental immigrants that
knock at our door, thereby adding greatly to the wealth and the
strength of the Nation.
HARRIS WEINSTOCK.
1 See supplementary reports.
3 See supplementary report. Appointed commissioner Mar. 17, 1915, to serve the unei-
pired term of Hon. F. A. Delano, resigned.
REPORT OF COMMISSIONERS WEINSTOCK, BALLARD, AND
AISHTON.
We concur in the report prepared by Commissioner Commons,
dissenting, however, on the two following points, and supplementing
it by certain other findings and recommendations following herewith.
First. We dissent from the recommendation that the secondary
boycott should be legalized. We regard the secondary boycott as
unjust, inequitable, and vicious, in that it subjects third and inno-
cent parties to injury and, at times, to great loss if not ruin. We
are, therefore, as much opposed to it as we are to the blacklist.
There have been instances where, for example, a strike would occur
on a newspaper. The strikers would demand, for example, that a
certain business house advertising in such paper should, despite the
fact that it was under contract, withdraw its patronage, and on re-
fusal of the advertiser to violate its contract with the newspaper, it
became the victim of boycotts at the hands of the strikers more or
less injurious, if not disastrous, in their results to such advertiser.
The Supreme Court of the United States has, in our opinion, wisely
and justly declared the secondary boycott illegal, and we regard it
as an injury to society to legalize a system so vicious.
It has been pointed out that —
* * * the boycott is the chief weapon of modern unionism, and also
characteristic generally of its spirit and methods. A discussion of a boycott
as a mere withdrawal of patronage is idle and academic. When that is the
extent of the boycott in any particular case, the patronage is simply with-
drawn, and nothing more is heard about it. From that simple procedure the
modern boycott has been developed into a very different thing, and what has
become known as the secondary boycott, dragging in third parties to the dis-
pute and penalizing them for patronizing one of the parties to the dispute, has
played an important part.
Dealing with this phase of the question, Judge William H. Taft,
in an early case (1893), said:
The boycott is a combination of many to cause a loss to one person by
coercing others against their will to withdraw from him beneficial business
intercourse by threats that unless those others do so, the many will cause
serious loss to them.
In the case of Moore v. The Bricklayers' Union, Judge 'William
H. Taft says :
The conflict was brought about by the effort of defendants to use plaintiff's
right of trade to injure Parker Bros., and, upon failure of this, to use plain-
tiff's customers' rights of trade to injure the plaintiff. Such effort can not be
in the bona fide exercise of trade, is without just cause, and is therefore ma-
licious. The immediate motive of defendants here was to show to the build-
ing world what punishment and disaster necessarily follows a defiance of their
demands. The remote motive of wishing to better their condition by the power
so acquired will not, as we think we have shown, make any legal justification
for defendants' acts. We are of the opinion that even if acts of the character
and with the intent shown in this case are not actionable when done by in-
dividuals, they become so when they are the result of combination, because it
is clear that the terrorizing of a community by threats of exclusive dealing in
order to deprive one obnoxious member of means of sustenance, will become
both dangerous and oppressive.
231
232 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
The Anthracite Coal Strike Commission, in its report in touching
upon secondary boycotts, says:
It was attempted to define the boycott by calling the contest between em-
ployers and employees a war between capital and labor, and pursuing the
analogies of the word, to justify thereby the cruelty and illegality of conduct
on the part of those conducting the strike. The analogy is not apt, and the
argument founded upon it is fallacious.
There is only one war-making power recognized by our institutions, and that
is the Government of the United States and of the States in subordination
thereto, when repelling invasion or domestic violence. War between citizens
is not to be tolerated, and can not in the proper sense, exist. If attempted
it is unlawful, and is to be put down by the sovereign power of the State and
Nation. The practices which we are condemning would be outside the pale
of civilized warfare. In civilized warfare, women and children, and the
defenseless are safe from attack, and a code of honor controls the parties
to such warfare, which cries out against the boycott we have in view. Cruel
and cowardly are terms not too severe by which to characterize it.
Second. We further dissent from said report in its limitation of
public inquiry in labor disputes only to cases where both sides invite
such inquiry. We believe that in the public interest there are times
when compulsion in labor disputes is thoroughly justified. We feel,
with organized labor, that there should be no restriction put upon
the right to strike, realizing as we do, that the strike is the only
weapon which, in the interest of labor, can be effectively and legally
used to aid in bettering its conditions. We feel, also, that there
should be no restriction placed upon the employer in his right to
declare a lockout in order better to protect what he regards as his
interest, and we therefore would not favor any plan that would inflict
penalties upon the worker or upon the employer for declaring a
strike or lockout.
Where the two sides to a labor controversy are fairly well bal-
anced in strength, the winning side must depend, in the last analysis
upon the support of public opinion. Public opinion, therefore, be-
comes a most important factor in the interest of industrial peace.
Such public opinion, however, to be of value, must be enlightened.
Under prevailing conditions this is almost impossible. All that the
public is now able to get, as a rule, are garbled and ex parte state-
ments, more or less misleading and unreliable, which simply tend to
confuse the public mind.
Where strikes and lockouts take place on a large scale, and more
especially in connection with public utilities, the public inevitably
becomes a third party to the issue, in that it has more at stake than
both parties to the dispute combined. For example, if the street
railways of a large city are tied up, the loss to the railway companies
in the way of revenue, and to the workers in the way of wages, is
great, but this loss becomes insignificant compared with the loss
inflicted upon the rest of the community, to say nothing of the an-
noyance, inconvenience, and menace to life and property, which not
infrequently occur in such industrial disputes. The public, therefore,
as the third party to the issue, is justified in demanding that an
investigation take place, and that the facts be ascertained and pre-
sented in an impartial spirit to the general public, so that ways and
means may be found of adjudicating the dispute or of throwing the
influence of a properly informed public opinion on the side which has
the right in its favor.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 233
We, therefore, earnestly • recommend that in the case of public
utilities, the proposed industrial commission shall not only have
power to mediate and conciliate, but also, at the request of either
side to a dispute, or upon the initiative of the commission itself,
should have the power, all voluntary methods having failed, to
undertake a compulsory public inquiry when, in the discretion of
the commission, public interest demands it; that it be given the
fullest powers to summon witnesses, place them under oath, demand
books and documents, all with a view of ascertaining the under-
lying causes of the dispute and the issues involved, to the end of
making recommendations that, in the judgment of the board of in-
quiry, consisting of three members, one to be chosen by each side
and the third to be chosen by these two, would be a fair and reason-
able settlement of the points in dispute. It being understood, how-
ever, that neither side is obliged to accept such recommendations, but
may continue to strike or lockout, as the case may be. Meanwhile,
however, the public will have ascertained in the most reliable way
the issues involved, the facts as they have been found by the board
of inquiry, and the basis upon which a fair settlement can be estab-
lished, thus enabling the public more intelligently to throw its sup-
port where it rightfully belongs.
With the two foregoing modifications, we heartily concur in the
report prepared by Commissioner Commons. We desire, however,
additionally, to report as follows:
We find that the alleged findings of fact and, in a general way,
the comments thereon made in the report of the staff of this commis-
sion, under the direction of Mr. Basil M. Manly, which has ^been
made a part of the records of this commission, without the indorse-
ment, however, of the commission, so manifestly partisan and unfair
that we can not give them our indorsement. What we regard as the
desirable recommendations in the report of Mr. Manly are dealt with
to our satisfaction in the Commons report, which has our approval.
We find that Mr. Manly's report places practically all the responsi-
bility for the causes of industrial unrest at the doors of one side,
forgetting that both sides to the issues are human, and, being human,
are guilty of their fullest share of wrongdoing, and are alike respon-
sible in greater or lesser degree, for the causes of industrial unrest.
We are, therefore, prompted, in the interest of fairness and justice,
to present herewith some of the additional causes of industrial
unrest that, in the course of the investigations and public hearings
of the commission, have forced themselves upon our attention.
Despite the fact that we have been appointed to represent, on this
commission, the employers of the Nation, we are free to admit that
the investigations made by the commission, and the testimony
brought forth at our public hearings, have made it plain that em-
ployers, some of them, have been guilty of much wrongdoing, and
have caused the workers to have their fullest share of grievances
against many employers. There has been an abundance of testimony
submitted to prove to our satisfaction that some employers have
resorted to questionable methods to prevent their workers from or-
ganizing in their own self-interest; that they have attempted to
defeat democracy by more or less successfully controlling courts and
legislatures; that some of them have exploited women and children
and unorganized workers; that some have resorted to all sorts of
234 REPORT OP COMMISSION ON INDUSTRIAL RELATIONS.
methods to prevent the enactment of remedial industrial legislation ;
that some have employed gunmen in strikes, who were disreputable
characters, and who assaulted innocent people and committed other
crimes most reprehensible in character; that some have paid lower
wages than competitive conditions warranted, worked their people
long hours and under insanitary and dangerous conditions; that
some have exploited prison labor at the expense of free labor; that
some have been contract breakers with labor ; that some have at times
attempted, through the authorities, to suppress free speech and the
right of peaceful ' assembly ; and that some have deliberately, for
selfish ends, bribed representatives of labor. All these things, we
find, tend to produce industrial unrest, with all its consequent and
far-reaching ills.
There is, therefore, no gainsaying the fact that labor has had
many grievances, and that it is thoroughly justified in organizing
and in spreading organization in order better to protect itself against
exploitation and oppression.
On the other hand, in justice to employers generally, it must be
said that there has been much evidence to show that there is an
awakening among the enlightened employers of the Nation, who have
taken a deeper personal interest in the welfare of their workers than
ever before in industrial history; that such enlightened employers
are growing in number and are more and more realizing that, if for
no other reason, it is in their own self-interest to seek the welfare
of their workers and earnestly to strive to better their conditions.
Employers, on their own initiative, have created sick funds and pen-
sion funds ; have expended vast sums of money to insure greater
safety to their workers; have, as compared with conditions of the
past, greatly improved their methods of sanitation ; have done much
to regularize employment; have increased wages; and in every way
have endeavored to lighten the burdens of their workers.
While there are many deplorable conditions yet remaining to be
rectified, and while the condition of the worker is still far from ideal,
we believe that, on the whole, the impartial investigator must find
that, in normal times, on the average, the hours of the American
worker are the shortest, his wages the highest, his working conditions
the most favorable, his standard of living the highest, and his gen-
eral well-being the best in the world's industrial history.
Industrial Commissioner John B. Lennon, who is also a member
of the executive council of the American Federation of Labor, in the
absence of official figures has estimated that there are at this time
about 20,000,000 wage earners in the United States, and that about
3,250,000 of these are members of various labor unions. In other
words, as a liberal approximation, about 16 per cent of the wage
earners of America are members of trade unions.
Considering that the American Federation of Labor came into
life in 1881, some 34 years ago, and considering the earnest and
zealous efforts that have been made by its representatives and the
representatives of other labor organizations to agitate, educate, and
organize, and considering still further the highly commendable ob-
jects professed by organized labor, the membership results are dis-
appointingly small.
One reason given for the comparatively small percentage of union-
ists in the ranks of labor is the hostility against unionism on the part
REPORT OF COMMISSION O'N INDUSTRIAL RELATIONS. 235
of many employers. Organized labor points out that there are many
employers' associations that are organized not to deal with, but to
fight, unionism, and that this, in many instances, and more especially
in the larger industrial enterprises, presents a very serious obstacle
for organized labor to meet and to overcome.
Representing as we do on this commission the employers' side, we
are as one with the other members of our Federal commission who
represent the general public, and also with those representing or-
ganized labor, in believing that, under modern industrial conditions,
collective bargaining, when fairly and properly conducted, is con-
ducive to the best good of the employer, the worker, and society.
We find that there are many enlightened employers who concur in
this view, who in the past recognized and dealt with organized labor,
but who now refuse to do so, and who, under proper conditions,
would willingly continue to engage in collective bargaining. With
food cause, in our opinion, however, they place the responsibility
or their refusing to do so at the door of organized labor. There is
an abundance of available testimony in our records to show that
many employers are frightened off fi«om recognizing or dealing with
organized labor for fear that to do so means to put their heads in
the noose and to invite the probability of seriously injuring, if not
ruining, their business.
The prime objection that such employers have to recognizing and
dealing with organized labor is the fear of (a) sympathetic strikes,
(&) jurisdictional disputes, (c) labor union politics, (d) contract
breaking, (e) restriction of output, (/) prohibition of the use of non-
union-made tools and. materials, (g) closed shop, (h) contests for
supremacy between rival unions, (i) acts of violence against non-
union workers and the properties of employers, (j) apprenticeship
rules.
While we have found many sinners among the ranks of the em-
ployers, the result of our investigation and inquiries forces upon us
the fact that unionists also can not come into court with clean hands ;
that this is not a case where the saints are all on one side and the
sinners all on the other. We find saints and sinners, many of them,
on both sides.
The hope of future industrial peace must lie in both sides using
their best endeavors to minimize the causes that lead to the growth
of sins and sinners on each side of the question.
SYMPATHETIC STRIKES.
•
Taking up seriatim the objections offered by many employers to
recognizing and dealing with organized labor, we come first to that
of the sympathetic strike. The employer contends, and we find our-
selves in sympathy with his contention, that it is a rank injustice to
subject him to a strike of his employees who have absolutely no
grievances, to stop work because some other group of workers,
possibly at a remote point, have a real or fancied grievance against
their own employer, especially when such stoppage of work may
not only inflict a very serious loss, but may mean ruin to the enter-
prise of the innocent employer, thus making it, in violation of all the
236 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
equities, a clear case of punishing the many innocent for the one or
the few who may be guilty, who were party to the original dispute.
JURISDICTIOXAL DISPUTES.
The employer further points out that not only is his business liable
to be ruined by the S37mpathetic strike, but, more especially in the
building trades, is he likely to become an innocent victim of jurisdic-
tional disputes for which he is in no wise responsible and over which
he has absolutely no control.
Sidney and Beatrice Webb point out that —
It is no exaggeration to say that to the competition between overlapping
unions is to be attributed about nine-tenths of the ineffectiveness of the trade-
union world.1
Innumerable instances have occurred where jurisdictional strikes have lasted
for months and sometimes for years.2
The elevator constructors had a serious and costly dispute with the machinists
in Chicago over the installation of pumps connected with hydraulic elevators.
A strike resulted for more than two years, during which most of the elevator
men in the city were out of work while members of the machinists and other
unions supplied their places with the Otis Elevator Co.2
In 1910 the secretary of the bricklayers said :
Our disputes with the operative plasters' union during the past year have
taken thousands of dollars out of our international treasury for the purpose of
protecting our interest. The loss in wages to our members has amounted to at
least $300,000. The loss to our employers has been up in the thousands, also.2
Prof. Commons, in his studies of the New York building trades,
comments on the jurisdictional disputes as follows:
Building construction was continuously interrupted, not on account of lock-
outs, low wages, or even employment of nonunion men, but on account of
fights between the unions. A friendly employer who hired only union men, along
with the unfriendly employer, was used as a club to hit the opposing union, and
the friendly employer suffered more than the other.3
The Chicago machinery movers caused considerable delay in the construction
of the Harris Trust Building, and in a period of less than a year were re-
sponsible for no less than 50 separate strikes, during which the work of the
employers was delayed.4
Jurisdictional disputes waste both labor and capital. They make it imprac-
ticable in many cases to use improved appliances and cheaper materials. They
are responsible for hesitancy in undertaking and increasing expense in prose-
cuting buildings, to the detriment of the building industry.4
Finally, where the disputes are long continued, they are responsible for that
whole train of evil results which follows upon idleness and poverty.6
Sidney and Beatrice Webb agnin point out that in the industries of Tyne-
side, within a space of 35 months, there were 35 weeks in which one or the
other of the four most important sections of workmen in the staple industry of
the district absolutely refused to wTork. This meant compulsory idleness of
tens of thousands of men, the selling out of households, and the semistarvation
of whole families totally unconcerned with the disputes, while it left the unions
in a state of weakness from which it will take years to recover.6
That wise and far-seeing labor leaders keenly appreciate the great
wrongs inflicted not only upon the employers, but upon the workers
themselves, by virtue of cessation of work in jurisdictional disputes,
is emphasized by the following extracts from the report of Mr.
1 Industrial Democracy, vol. 1, p. 121.
2 The Bricklayer and Mason, February, 1911, p. 127.
3 Trade-Unionism and Labor Problems.
4 Interview, secretary of Building Employers' Association, Chicago, July, 1912.
5 Industrial Democracy, vol. 1, p. 121.
« Ibid., vol. 2, p. 513.
EEPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 237
Samuel Gompers, president of the American Federation of Labor, at
its convention in 1902:
Beyond doubt, the greatest problem, the danger which above all others is
threatening not only the success but the very existence of the American Federa-
tion of Labor, is the question of jurisdiction. Unless our affiliated national
and international unions radically and soon change their course, we shall, at no
distant date, be in the midst of an internecine contest unparalleled in any era
of the industrial world, aye, not even when workmen of different trades were
arrayed against each other behind barricades over the question of trade against
trade. They naturally regard each other with hatred, and treat each other as
mortal enemies.
There is scarcely an affiliated organization which is not engaged in a dispute
with another organization (and in some cases, with several organizations)
upon the question of jurisdiction. It is not an uncommon occurrence for an
organization, and several have done so quite recently, to so change their laws
and claims to jurisdiction as to cover trades never contemplated by the or-
ganizers, officers, or members; never comprehended by their titles, trades of
which there is already in existence a national union. And this without a word
of advice, counsel, or warning.
I submit that it is untenable and intolerable for an organization to attempt
to ride roughshod over and trample under foot rights and jurisdiction of a
trade, the jurisdiction of which is already covered by an existing organization.
This contention for jurisdiction has grown into such proportions and is fought
with such an intensity as to arouse many bitter feuds and trade wars. In
many instances employers fairly inclined for organized labor are made inno-
cently to suffer from causes entirely beyond their control.
As proof of the prophetic and far-sighted utterances of President
Gompers, it has been pointed out that " in 1911, in Chicago, his
grim prophecy was actually fulfilled in the bitter jurisdictional wars
fought by rival unions in that city in which paid thugs and gunmen
turned the streets of Chicago into a condition of anarchy, and in
which, as a mere incident from the union standpoint, millions of
dollars of construction work remained idle, with a resultant loss to
owners, contractors, and the business interest of the city beyond pos-
sibility of calculation."
We ask, what sane or thoughtful employer would willingly put his
head in a noose such as this by recognizing and dealing with unions,
and thus invite possible ruin ?
LABOR UNIOtf POLITICS.
•
The third objection of employers to recognizing and dealing with
organized labor is the risk they run, especially in the building trades,
where power to declare a strike is concentrated in the hands of a
business agent, of finding themselves at the mercy of either a cor-
rupt business agent or one who, for the sake of union politics, is
endeavoring, in order to perpetuate himself in office, to make capital
at the expense of the innocent employer by making unwarranted and
unreasonable demands against the employer.
CONTRACT BREAKING.
The fourth reason offered by the employers for refusing to recog-
nize or to deal with organized labor, is its increasing unreliability
in keeping trade agreements. To give one case in point, our record
gives the story in undisputed statement published in the United
Mine Workers' Journal, which is the official organ of the United
Mine Workers of America, written by Mr. W. O. Smith, ex-chair-
man of the executive committee of the Kentucky District of United
238 KEPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
Mine Workers of America, in which Mr. Smith, among other things,
says :
Because of the indifference of the conservative members of our unions, and
the activity of the radical element which is responsible for the greatest menace
which has ever threatened the United Mine Workers of America, the local
strike, during the past two or three years the international, as well as the
district and subdistrict officials, have been confronted with many perplexing
problems, some of which seem to threaten the very life of the organization.
But I believe I am safe in saying that no problem has given them so much
concern as the problem of local strikes in violation of agreements.
Thousands of dollars are expended every year in an effort to organize the
250,000 nonunion miners in the United States, while hundreds of our members
go on strike almost every day in absolute, unexcusable violation of existing
agreements.1
This criticism comes not from an e'mployer, but from an ardent,
earnest unionist, in high standing in his organization.
Corroborating the statement of Mr. Smith, comes a statement pub-
lished in Coal Age of December 20, 1913, issued by the Association
of Bituminous Coal Operators of Central Pennsylvania, addressed to
Mr. Patrick Gilday, president of District No. 2, U. M. W. of A.,
Morrisville mines, Pennsylvania, dated Philadelphia, December 12^
1913, in w.hich, among other things, the following appears :
Whereas, Rules 12 and 13 of said agreement provide, " that should differences
arise between the operators and mine workers as to the meaning of the pro-
visions of this agreement or about matters not specifically mentioned in this
agreement, there shall be no suspension of work on account of such difference,
but an earnest effort be made to settle such differences immediately." Whereas,
notwithstanding the fact that Rule 15 provides the right to hire and discharge,
the management of the mine and the direction of the working forces are vested
exclusively in the operator, the United Mine Workers of America have abso-
lutely disregarded this rule, in that they have at numerous times served notices
on substantially every operator belonging to our association, that unless all the
employees working for such operators should become members of the union on
or before certain dates mentioned in said notices, that they, the Mine Workers,
would close or shut down the operators' respective mines, and in many instances
did close the mines for this reason, and refused to return to work unless such
nonunion employees were discharged. This conduct is in direct violation of
the contract, and specifically interferes writh and abridges the right of the oper-
ator to hire and discharge ; of the management of the mine, and of the direction
of the working forces; this conduct in -violation of contract on the part of the
Mine Workers, as well as that mentioned in the preceding paragraph, has
resulted in more than one hundred strikes during the life of our scale agree-
ment.2
Numerous other illustrations could be given from the records of
the commission, showing that there are other instances where unions
did not observe their contracts, tending to make, in the minds of
many employers, a character for all unionism, and thus increasing
their hesitancy in recognizing and dealing with unions.
RESTRICTION OF OUTPUT.
Not least among the reasons given by fair-minded employers for
refusing to recognize or deal with labor unions, is the fact that many
unions stand for a limited output, thus making among their workers
for the dead level, and thereby malting it impossible for the union
employer successfully to compete with the nonunion employer, who
is not faced with such handicap.
1 New York hearings, IT. S. Commission on Industrial Relations, pp. 2750-2751.
2 Now York hearings, U. S. Commission on Industrial Relations, pp. 2061-20G2.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 239
British industrial conditions are cursed with the practice of limited
output, as compared with the absence of this practice in industrial
Germany. As a consequence, Germany, in time of peace, has indus-
trially outrun Great Britain by leaps and bounds.
The British unionist, by practicing limited output, has thus played
directly into the hands of his keenest industrial competitor, the
German.
The records of the commission also show that organized labor,
almost as a unit, is very strongly opposed to the introduction in in-
dustry of what has become known as scientific management, or
efficiency methods. In relation to this phase of the problem, we find
ourselves as one with the statement made and the opinions expressed
by Mr. Louis D. Brandeis before the commission at Washington, in
April, 1914, who, when invited to express his opinion on the question
of efficiency standards, scientific management, and labor, among other
things, said:
My special interest in this subject arises from the conviction that, in the
first place, workingmen, and in the second place, members of the community
generally, can attain the ideals of our American democracy only through an
immediate increase and perhaps a constant increase, in the productivity of
man. * * * Our ideals could not be attained unless we succeed in greatly
increasing the productivity of man. * * * The progress that we have
made in improving the conditions of the workingman during the last century,
and particularly during the last 50 years, has been largely due to the fact that
intervention or the introduction of machinery has gone so far in increasing the
productivity of the individual man. With the advent of the new science of
management has come the next great opportunity of increasing labor's share
in the production, and it seems to me, therefore, of the utmost importance, not
only that the science should be developed and should be applied as far as
possible, but that it should be applied in cooperation with the representatives of
organized labor, in order that labor may now, in this new movement, get its
proper share.
I take it that the whole of this science of management is nothing more than
an organized effort, pursued intensively, to eliminate waste. * * * It is in
the process of eliminating waste and increasing the productivity of man, to
adopt those methods which will insure the social and industrial essentials,
fairness in development, fairness in the distribution of the profits, and the
encouragement to the workingman which can not come without fairness.
I take it that in order to accomplish this result, it is absolutely essential that
the unions should be represented in the process. * * * When labor is given
such a representation, I am unable to find anything in scientific management
which is not strictly in accord with the interests of labor, because it is nothing
more than fair, through the application of these methods which have been
pursued in other branches of science, to find out the best and the most effective
way of accomplishing the result. It is not making men work harder — the very
effort of it is to make them work less hard, to accomplish more by what they
do, and to eliminate all unnecessary motion, to give special effort and special
assistance to those who, at the time of the commencement of their work, are
mostly in need of the assistance because they are less competent.
As I view the problem, it is only one of making the employer
recognize the necessity of the participation of representatives of labor in the
introduction and carrying forward of the work, and on the other hand, bring-
ing to the workingman and the representatives of organized labor, the recog-
nition of the fact that there is nothing in scientific management itself which is
inimical to the interests of the workingman, but merely perhaps the practices
of certain individuals, of certain employers or concerns who have engaged
in it.
I feel that this presents a very good opportunity for organized labor. It
seems to me absolutely clear, as scientific management rests upon the funda-
mental principles of advance in man's productivity, of determining what the
best way was of doing a thing, instead of the poor way, of a complete coordi-
nation and organization of the various departments of business, that the intro-
duction of scientific management in our businesses was certain to come; that
240 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
those who oppose the introduction altogether are undertaking a perfectly im-
possible task ; and that if organized labor took the position of absolute opposi-
tion, instead of taking the position of insisting upon their proper part in the
introduction of this system, and the conduct of the business under it, organized
labor would lose its greatest opportunity, and would be defeating the very pur-
pose for which it exists.
On being asked the question what, in his opinion, would be the
status of unionism in the event of scientific management becoming
a common industrial condition, Mr. Brandeis said:
I think there would be a great deal left for unionism to do, and do not think
the time will come when there will not be, as long as there is a wage system
in existence. * * * I do not feel that we have reached the limit of the
shorter day, certainly not in some employments, nor do I think we have
reached the limit of the higher wage ; certainly we have not reached the limit
of the best conditions of employment in many industries.
All of these subjects are subjects which must be taken up, and should be
taken up by the representatives of the men and women who are particularly
interested. There will be work for unions to do as long as there is a wage
system.
Mr. Brandeis further stated that he saw no menace to unionism in
scientific management, and that he favored labor having a voice in
determining all the factors involved in scientific management.
In answer to the question if he thought the fears groundless on the
part of organized labor in looking upon scientific management as a
menace to unionism, he answered, saying:
Yes ; groundless except for this — I think, for instance, that the existence of
the system of scientific management, unless the unions choose to cooperate
with the effort to install it, may menace unionism, because the most efficient
and advanced employers may adopt it, whether the unions like it or not, and in
that way these establishments may become successful, and be so buttressed
by their success as to be able to exclude unions from their business. That is
the menace, if they do not take part, but if they cooperate it seems to me it
simply advances unionism.
Mr. Brandeis confirmed the thought that if unionism is wise it
will make the most of its opportunity by enlisting its cooperation in
the movement, and will endeavor to bring scientific management to
its highest possibility at the earliest day, in order that it may better
share the increased surplus created by such scientific management,
and that for unions to work against it is in the nature of a colossal
error. The testimony of Miss Ida 'Tarbell on this point was in full
accord with that of Mr. Brandeis.
PROHIBITION OF USE OF NONUNION -MADE TOOLS AND MATERIAL.
The sixth reason offered by employers for refusing to recognize or
to deal with organized labor is that when they do so they are often
not permitted to use nonunion-made tools or materials, thus placing
upon themselves a burden and a hardship from which nonunion em-
ployers are free, and thus also laying themselves liable to get into all
sorts of controversies with the union, which are vexatious, annoying,
time-losing, and, frequently, most costly, as they sometimes lead to
grave and serious strikes.
CLOSED SHOP.
The seventh reason why many employers refuse to recognize or to
deal with organized labor (and among these may be mentioned the
employers of large bodies of workers who have previously had trade
agreements with organized labor) is the matter* of the closed shop.
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 241
Many such employers are quite willing to recognize and to deal
with unions upon a tacit or written open-shop agreement, but they
have no confidence, based on their previous experience, that an open-
shop agreement will be respected by the unions. Such employers
labor under the fear that, despite an open-shop agreement or under-
standing, the union, at its first opportunity, will force them to com-
pel the nonunion worker to join the union. Employers such as these
are unwilling to place themselves in the position where the union
can control them despite an open-shop agreement or understanding
and, so to speak, put a pistol to their heads and command them
in turn to command a nonunion worker on pain of dismissal to join
the union. Such employers feel that, having an open-shop agree-
ment or understanding, if for any reason a worker does not choose
to join the union, they as employers should no more compel him to
do so than they would compel him to join any particular fraternal
society or religious body. They feel that if they are working under
an open-shop agreement or understanding and such nonunion worker
is capable, efficient, and has rendered long and faithful service, that
they are doing him and themselves a great injustice either to force
him into a union or to discharge him because he will not join a union.
Where an employer enters into an agreement with a union which
does not stipulate that only union men shall be employed but leaves
the employer free to employ exclusively union men or some union and
some nonunion men as he may prefer, so long as he maintains for all
men union conditions, that in such an event the union has no right to
demand that the nonunionist should be compelled by the employer to
join the union or a strike will follow. For the union, under such con-
ditions, to strike, as it has done, notably in the Pennsylvania coal
fields, and as pointed out also by W. O. Smith, ex-chairman of the
executive committee of the Kentucky district of the United Mine
Workers of America, whose statements have been quoted herein, is
a violation, on the part of the union, of its contract.
It may be held that unionists working under an open-shop agree-
ment or understanding always reserve to themselves the right, for
any reason or for no reason, to cease to work alongside of nonunion
men, and that they further reserve the right to determine the psycho-
logical moment at which it is in their interest to cease work or to go
on a strike because they will not work alongside of nonunion men.
It is the fear of the likelihood of their doing this that frightens
off many employers from recognizing or dealing with organized
labor. They feel that even when they are operating under an open-
shop agreement or understanding which does not deny them the
right to employ nonunion men so long as they work under union
conditions, they are working with a sword suspended over their
heads by a slender thread, which may break at any moment, and are
liable to have a strike on their hands at the most critical time, which
may spell ruin for their business. Employers, as a rule, do not deem
it a good business policy to invite such risks.
An impressive example of this policy on the part of organized labor
was brought out in the testimony taken by the commission at Lead,
S. Dak. Supt. Grier, of the Homestake IVIining Co., Lead, S. Dak.,
at the hearing held by the commission at that point in August, 1914,
stated that he had recognized and dealt with the Lead City Miners'
38819°— 16 16
242 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
Union from 1877 to 1909, with the understanding that they were at
liberty to employ union or nonunion men as they preferred. Late in
October, 1909, a resolution was published in the daily papers that
on and after the 25th of November, 1909, members of the federation
would not work with those working for the Homestake Mining Co.
who failed and neglected to become members of the union in good
standing; and in consequence, on the 25th of November, the mine
was closed down, and from that day on the company has not recog-
nized nor dealt with organized labor.
We are, however, of the opinion that where an employer enters
into an agreement with a union which stipulates that only union
men shall be employed, a thing which he has both a moral and a legal
right to do, the nonunion worker, in that event, can have no more
reason to find fault with the employer in declining fo employ him
than a certain manufacturer would have if the employer, for rea-
sons satisfactory to himself, should confine his purchases to the
product of some other manufacturer.
CONTESTS FOR SUPREMACY BETWEEN RIVAL UNIONS.
Testimony has been given before this commission indicating, in
more than one instance, that contests between rival unions, or fac-
tions of the same union, have led to strikes causing industrial unrest
from which the worker as well as the employer, has suffered harm
and loss.
ACTS OF VIOLENCE AGAINST NONUNION WORKERS AND THE PROPERTIES OF
EMPLOYERS.
The ninth objection raised on the part of the employers against
unionism, which has been substantiated abundantly by investigation
and by testimony taken by the commission, is the resort on the part
of unionists to violence in labor troubles, and to the fact that union-
ists condone such violence when committed in the alleged interest
of labor.
The most notable case, of course, in modern industrial history, is
that of the structual iron workers, which resulted in the plea of
guilty on the part of the McNamara brothers, for the blowing up of
the Los Angeles Times Building, killing over 20 innocent people, and
which further resulted in Frank Ryan, the president of the Struc-
tural Iron Workers' National Union, and a group of other labor
union officials, being convicted and sentenced to prison.
As a matter of fact, the bringing into life of this United States
Commission on Industrial Relations was due primarily to the long
series of crimes committed at the instance of the structural iron
workers' union, wrhich culminated in the blowing up of the Los
Angeles Times Building, with its attendant loss of life of innocent
citizens, and which aroused a state of public sentiment demanding
that an investigation be made by an impartial Federal body, to
inquire into the underlying causes of industrial unrest, the existence
of which seemed to be evidenced by the violent activities on the part
of labor in various parts of the country.
Vincent St. John, secretary of the Industrial Workers of the
World, in his testimony before the Commission on Industrial Rela-
REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 243
tions at a public hearing in New York, said that he believed in
violence when it was necessary to win. He said that if the destruc-
tion of property seemed necessary to bring results, then he believed
in the destruction of property.
A. Johannsen, of California, State organizer for the building
trades of California, and general organizer for the United Brother-
hood of Carpenters, in his testimony before the United States Com-
mission on Industrial Relations at Washington in May, 1915, in
speaking of the reelection of Frank Ryan, president of the National
Structural Iron Workers' Union, among other things thanked the
Lord that the union had the courage to reelect him president after
he had been convicted as a participant in the dynamiting crimes of
the structural iron workers. He further expressed the hope that it
was true that the convicted dynamiters, after being reelected to office
by the iron workers, were met by a procession or applause at Fort
Leavenworth while on their way to prison, and that President Ryan
performed his official duties while there, and rendered his official
reports as president of a union of 10,000 members and a part of the
American Federation of Labor.
In contradistinction to the opinion of Mr. Johannsen, to the effect
that he thanked the Lord that the union had the courage to reelect
Frank Ryan president after he had been convicted as a participant
in the dynamiting crimes of the structural iron workers, we have the
opinion of Dr. Charles W. Eliot, president emeritus of Harvard
University, who, in his testimony before the United States Commis-
sion on Industrial Relations at New York, January 29, 1915, in
referring to this very instance, said, in answer to the question as to
how he regarded the action of the structural iron workers' union in
reelecting Frank R}Tan president after his conviction of crime, "As
a serious moral offense against the community as a whole." 1
Speaking about respecting court labor injunctions, Witness Jo-
hannsen said:
I don't think the power of an injunction goes much beyond the courage of
those who are enjoined. I think that if a person is convinced in his own mind
and his own feelings that his case is just, that his demands for an increase of
wages, or whatever the fight may he — if you think and feel you are right, why,
then go ahead. Never mind about those pieces of paper.2
On being asked whether he (Johannsen) believed that Frank
Ryan, president of the Structural Iron Workers' National Union,
and his associates, were innocent men railroaded to prison, he said
that he did, and that he wTas satisfied they never committed any
crime against labor or a better society, and were therefore unjustly
convicted. This was his attitude, despite his attention having been
called to the opinion and decision rendered by the circuit court of
appeals, including Judges Baker, Seaman, and Kohlsaat, against
whose integrity and fairness no whisper had ever been heard, and
who seemingly went into the evidence in the dynamiting cases most
exhaustively and carefully, and who, among other things, in their
decision, said —
The facts thus recited, as proven by the Government on the trial, may be
mentioned in part as follows : Almost 100 explosions thus occurred, damaging
and destroying buildings and bridges in process of erection where the work
1 Now York hearings, TT. S. Commission on Industrial Relations, p. 1007.
2 Washington hearings, May, 1915, U. S. Commission on Industrial Relations, p. 958.
244 BEPORT OF COMMISSION ON INDUSTRIAL RELATIONS.
was being done by open-shop concerns, and no explosions took place in connec-
tion with work of a similar character, where the work was done by closed-
shop concerns. * * * In connection with this work of destruction, dyna-
mite and nitroglycerine was purchased and stolen, and various storage places
arranged to conveniently store such explosives which were to be used in the
destruction of property in the various States referred to. * * * Large
quantities of dynamite and nitroglycerine were at various times stored in the
vaults of the association at Indianapolis, and also in the basement of the build-
ing. * * * Four explosions occurred in one night at the same hour in
Indianapolis, and explosions were planned to take place on the same night,
two hours apart, at Omaha, Nebr., and Columbus, Ind., and the explosions
so planned did occur on the same night, at about the same time, instead of two
hours apart, owing to the fact that one clock was defective. * * * All the
dynamite and nitroglycerine * * * including the expenses incident to
the stealing of the dynamite, were paid out of the funds of the international
association, and these funds \vere drawn from the association upon checks
signed by the secretary-treasurer, John J. McNamara, and the president,
Frank M. Ryan, plaintiff in error.
The written correspondence on the part of many of the plaintiffs in error
* * * furnish manifold evidence not only of understanding between the
correspondents of the purposes of the primary conspiracy, but many thereof
convey information or direction for the use of the explosives, while others
advise of the destruction which has occurred, and each points unerringly not
only to the understanding that the agency therein was that of the conspirators,
but as wrell to the necessary steps in its performance of transporting the
explosives held for such use. This line of evidence clearly tends to prove,
and may well be deemed convincing of the fact on the part of many, if not all,
of the correspondents.
Plaintiff Frank M. Ryan was president of the association and of its execu-
tive board, and was active manager and leader of the contest, and policies
carried on throughout the years of the strike and destructive explosions in
evidence. Letters written and received by him at various stages of the contest
clearly tend to prove his familiarity with and management of the long course
of destroying open-shop structures, however guarded in expression. He was
at the headquarters of the association for the supervision of operations periodi-
cally, usually two or three days each month, uniformly attended the meetings
there of the executive board, and made frequent visits to the field of activities.
* * * He signed all of the checks in evidence for payments for expenditures
for purchase, storage, and conveyance of explosives. * * * Many other
letters in evidence, both from and to him, however disguised in terms, may well
authorize an inference of his complete understanding of, and complicity for,
the explosions, both in plans and execution.1
Masses of testimony were filed with the commission to prove that
organized labor at times resorted to a policy of lawlessness. Among
other documents may be cited a magazine under the title of A
Policy of Lawlessness, a partial record of riot, assault, murder, and
intimidation, occurring in strikes of the iron molders' union, during
1904, 1905, 1906, 1907, published by the National Founders' Asso-
ciation, in which are given, as a partial list taken from court records,
a great number of instances of violence on the part of labor unionists
in labor disputes; and also a document published as a report, sub-
mitted by the committee on labor disputes of the Cleveland Chamber
of Commerce, entitled " Violence in Labor Disputes, " giving hun-
dreds of instances where unionists had resorted to violence in labor
troubles in that community alone.
Mr. Luke Grant, special investigator for the United States Com-
mission on Industrial Relations, in his report to the commission on
1 Washington hearings, May, 1915, TJ. S. Commission on Industrial Relations, pp. 1004-
1013.
KEPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 245
the National Erectors' Association and the International Association
of Bridge and Structural Iron Workers, says :
Do they [the unions] believe in violence? They did not destroy property
and they don't know who did. They probably adopted resolutions denouncing
the unknown perpetrators, and offering a reward for their arrest and con-
viction. The Western Federation of Miners, in convention, offered a reward
for the arrest of the men who blew up the Independence depot in June, 1904,
killing 14 men. Harry Orchard afterwards confessed that he and Steve Adams
did it, acting as agents for the officers of the union.
In this way do union men collectively approve of violence, that few if any
of them would individually permit (p. 148).
Referring to the industrial war between the National Erectors'
Association and the structural iron workers' union, Mr. Grant con-
tinues to say:
When the hopelessness of the situation became apparent to the union officials,
resort was made to the destruction of property. Diplomacy was out of the
question, so dynamite was tried (p. 150).
The report of Luke Grant brings out the fact that the structural
iron workers had no grievances against their employers in the matter
of wages, hours, or working conditions. The only question at issue
was that of the closed shop. To enforce the closed shop, the struc-
tural iron workers seemed to feel themselves justified in dynamiting
over 100 properties and destroying many innocent lives.
Police Commissioner Arthur Woods, of the city of New York, in
his testimony before the United States Commission on Industrial
Relations in May, 1915, at Washington, D. C., speaking of violence 
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